T 


. 


I **«&>« 

1913 


THE  LIBRARY 

OF 

THE  UNIVERSITY 
OF  CALIFORNIA 

LOS  ANGELES 

SCHOOL  OF  LAW 


THE   LAW  OF 
QUASI    CONTKACTS 


THE   LAW 

OF 

QUASI    CONTRACTS 


BY 


FREDERIC   CAMPBELL  WOODWARD 

MI 

PROFESSOR   OF   LAW   IN 
ICELAND   STANFORD   JUNIOR   UNIVERSITY 


BOSTON 

LITTLE,   BROWN,  AND   COMPANY 
1913 


Copyright,  1918, 
BY  LITTLE,  BROWN,  AND  COMPANY. 


All  rights  reserved 

T 


ft  is 


IPrinterfl 
8.  J.  PARKHILL  &  Co.,  BOSTON,  U.S.A. 


ZTO 
JOHN  HENRY  WIGMOKE 

AND    THE    MEMORY   OP 

ERNEST  W.  HUFFCUT 

THIS    BOOK   IS    GRATEFULLY 
DEDICATED 


708737 


PREFACE 

Professor  Keener's  treatise  on  Quasi  Contracts  appeared  in 
1893.  It  has  done  much  to  clarify  the  views  of  lawyers  and 
teachers,  and  undoubtedly  has  had  a  salutary  influence  in  the 
development  of  the  law.  For  some  time,  however,  there  has 
been  urgent  need  of  a  book  containing  a  further  analysis  and 
classification  of  quasi  contractual  obligations,  a  more  thorough 
treatment  of  many  parts  of  the  subject,  and  a  larger  collec- 
tion of  modern  authorities.  It  was  with  the  hope  of  meet- 
ing this  need  that  the  present  work  was  undertaken. 

I  wish  to  acknowledge  my  indebtedness  to  previous  writers. 
The  treatise  of  Professor  Keener  and  the  case  books  of  Pro- 
fessor Scott  and  Professor  Woodruff  have  been  invaluable, 
and  various  contributions  to  the  literature  of  the  subject  by 
Professor  Ames  and  Professor  Williston  of  Harvard,  Professor 
Wigmore  and  Professor  Costigan  of  Northwestern,  and  Pro- 
fessor Corbin  of  Yale,  have  been  of  the  greatest  assistance. 
I  desire  also  to  record  my  appreciation  of  helpful  criticism 
and  advice  received  from  Professor  Wigmore  and  my  col- 
league Professor  Cathcart,  and  of  intelligent  assistance  from 
Walter  Slack,  Esq.,  of  the  San  Francisco  Bar. 

The  greater  part  of  Chapter  III  has  already  appeared  in 
the  form  of  an  article  in  the  Columbia  Law  Review,  and  is 
reproduced  here,  with  some  modification,  by  the  courtesy  of 

the  publishers  of  the  Review. 

F.  C.  W. 

STANFORD  UNIVERSITY,  CALIFORNIA, 
October  26,  1912. 


Vll 


CONTENTS 

PAOB 

PREFACE: ...vii 

TABLE  OP  CASES  CITED xxiii 

TREATISES  AND  ARTICLES  CITED       ....'...      lix 

CHAPTER  I 

INTRODUCTION:   ORIGIN  AND  NATURE  OF  QUASI 
CONTRACTS 

§  1.    (I)  Scope  of  the  subject 1 

§  2.     (II)  Origin  of  quasi  contracts .2 

§  3.     (Ill)  Nature  of  quasi  contracts 

(1)  Chief  characteristics 4 

§  4.        (2)  Quasi  contracts  distinguished  from  contracts      .        .  6 
§  5.        (3)  Quasi  contracts  distinguished  from  the  duty  not  to 

commit  a  tort 7 

§  6.        (4)  Quasi  contracts  distinguished  from  equitable  obliga- 
tions proper 8 

§  7.    (IV)  Essential  elements  of  quasi  contractual  obligation      .  9 

§  8.        (1)  Receipt  of  a  benefit 9 

§  9.        (2)  Retention  of  benefit  inequitable :  Classification  of 

quasi  contracts 9 

PART  I 

BENEFITS  CONFERRED  IN  MISRELIANCE  ON 
RIGHT  OR  DUTY 

CHAPTER   II 

GENERAL  PRINCIPLES 

§  10.    Definition  of  misreliance 11 

§  11.     (I)  Causes  of  misreliance  :  Mistake  of  fact  and  mistake  of 

law    .  12 


CONTENTS 

PAGE 

§  12.          Same  :  Mistake  of  anticipated  fact         ....  12 
§  13.    (II)  Misreliance  negatived 

(1)  By  knowledge  or  belief 13 

§  14.           Same :  Forgotten  facts 15 

§  15.           Same  :  Negligent  failure  to  ascertain  facts    ...  16 

§  16.        (2)  By  doubt :  Assumption  of  risk 18 

(3)  Bjy  compromise  orsettlement       .        . ^'  .        .  19 

[isreliance  on  right  or  duty,  as  distinguished  from 

policy 24 

§  19.    (IV)  Misreliance  on  right  against  or  duty  to  third  person  .  28 

§  20.     (V)  Circumstances  justifying  retention  of  benefit        .        .  30 

§  21.        (1)  Plaintiff  guilty  of  misconduct  toward  defendant       .  30 

§  22.        (2)  Plaintiff  under  moral  obligation  to  confer  benefit      .  31 

§  23.        (3)  Plaintiff's  failure  to  place  defendant  in  statu  quo        .  35 

§  24.        (4)  Plaintiff's  receipt  of  equivalent  benefit       ...  37 

§  25.        (5)  Change  of  position  by  defendant 38 

§  26.            (a)  Change  of  position  must  be  irrevocable  ...  41 
§  27.            (&)  Payment  over  or  settlement  with  principal  as  a 

defense  to  agent 42 

§  28.            (c)  Payment  over  as  a  defense  to  an  executor  or  ad- 
ministrator     . 44 

§  29.            (d)  Beneficial  disposition  of  money  or  goods  not  a  de- 
fense          45 

§  30.            (e)   Is  accidental  loss  or  theft  of  money  or  goods  a  de- 
fense?         47 

§  31.           (/)  Laches  as  a  defense 48 

§  32.    (VI)  When  does  cause  of  action  arise  ?    Necessity  of  de- 
mand      49 

§  33.    (VII)  Running  of  statute  of  limitations        ....  51 

§34.    (VIII)  Recovery  of  interest .53 


CHAPTER  III 

GENERAL  PRINCIPLES  (Continued} :   MISRELIANCE 
RESULTING  FROM  MISTAKE  OF  LAW 

§  35.    In  general 54 

§  36.     (I)  Reasons  for  the  rule  unsound 57 

§  37.    (II)  Encroachments  upon  the  rule : 

(1)  In  two  jurisdictions  rejected 59 

§  38.        (2)  In  England,  tendency  to  reject  rule  in  equity    .        .  60 

§  39.        (3)  Statutory  modifications 62 

§  40.        (4)  Payments  by  public  officers          .        .    _  .        .        .63 

x 


CONTENTS 

PAGE 

§  41.  (5)  Payments  to  trustees  or  court  officers  .  .  .64 
§42.  (Ill)  What  is  the  true  principle ?.  ,  .  .  ,  .  ...  .65 
§  43.  (IV)  Mistake  of  foreign  law  .  .  -  .  .  .  .  .70 
§  44.  (V)  Mistake  of  both  fact  and  law  .  .  .  .  -  .  .71 

CHAPTER  IV 

MISRELIANCE  ON  NON-EXISTENT  OR  INVALID 
CONTRACT 

§  45.    In  general .        .        .        . 74 

§  46.    (I)  Misreliance  on  contract :  Gifts  and  gratuitous  services 

distinguished 74 

§  47.        Same :  Peculiar  doctrine  of  a  few  cases     ....  77 

§  48.        Same :  Disappointed  expectations      .        .        .        .        .  78 

§  49.        Same :  Incidental  benefits 81 

§  50.        Same :  Burden  of  proof 82 

§51.  Same :  Effect  of  family  relationship  upon  burden  of  proof  83 
§  52.  (II)  Sundry  instances  of  obligation  classified  according  to 

nature  of  defect  in  contract : 
(A)  Acceptance  of  offer  wanting  : 

(1)  Because  of  ambiguity 85 

§  53.               Same  :  (2)  Because  of  offeree's  ignorance  of  offer      .  87 

§  54.  Same  :  (3)  Because  of  mistake  as  to  identity  of  offerer  88 
§  55.  Same :  (4)  Circumstances  justifying  retention  of 

benefit 88 

§  56.               Same :  (a)  When  defendant  knows  that  compensa- 
tion is  expected  :  Boston  Ice  Co.  v.  Potter   .    .        .89 
§  57.               Same :  (6)   When  defendant  believes  that  compen- 
sation is  not  expected 93 

§58.  Same:   (c)  Concord  Coal  Co.  v.  Ferrin,  and  Boulton 

v.  Jones 95 

§  59.         (B)  Assumed  fact  non-existent 97 

§  60.            Same:  (1)  Sale  or  lease  of  non-existent  property         .  98 

§  61.            Same :  (2)  Insurance  of  non-existent  risk      .        .        .  100 

§  62.            Same  :  (3)  Assignment  of  void  patent  ....  102 

§  63.            Same :  (4)  Sale  of  non-existent  or  defective  title .        .  104 

§  64.         (C)  Promise  indefinite 105 

§  65.            Same :  Engagements  of  honor  distinguished        .        .  106 

§  60.         (D)  Required  form  wanting 106 

§  67.         (E)  Contractual  capacity  wanting 108 

§68.            Same:  (1)  Married  women 108 

§69.            Same:  (2)  Infants 110 

§70.            Same:  (3)  Lunatics,  drunkards,  and  spendthrifts        .  112 

xi 


CONTENTS 

PAOE 

§71.  Same:  (4)  Corporations  .       .       .       .       .       .       .113 

§  72.        (F)  Authority  of  agent  wanting         .        .       .        ...    113 

§73.  Same :  Instrument  under  seal 116 

§74.           Same:   Agent's  abortive  execution  of  sealed  instru- 
ment         .119 

§  75.  Same :  Receipt  of  benefit  by  principal   .        .        .        .    1 19 

§  76.  Same :  Misuse  of  money  by  agent ....       .        .    122 

§  77.  Same  :  Receipt  of  benefit  by  agent :  Smout  v.  Ilbery  .    123 

§  78.  Same :  Restitution  against  public  policy :  Benefit  con- 

ferred upon  municipal  corporations    ....    124 

§  79.  Same :  Form  of  action  against  principal        .        .        .    125 


CHAPTER  V 

MISRELIANCE  ON  NON-EXISTENT  OR  INVALID 
CONTRACT  (Continued)  :  ALTERED  OR  FORGED 
NEGOTIABLE  INSTRUMENTS 

§  80.     (I)  Mistake  by  drawee  as  to  genuineness  of  body  of  instru- 
ment or  of  signature  of  drawer  or  indorser         .        .  126 
§  81.        Same :  Why  is  restitution  denied  where  drawer's  signa- 
ture is  forged  ?        ....        k        ...  128 
§  82.           (1)  The  conclusive  presumption  theory         .        .        .  129 

§83.           (2)  The  negligence  theory 129 

§  84.  (3)  The  equal  equities  theory .        .       *       .       .        .132 

§  85.            (4)  The  change  of  position  theory  .        .        .        .        .  135 
§  86.           (5)  The  theory  that  there  is  no  mistake  as  to  drawee's 

duty  to  holder 136 

§  87.           (6)  The  theory  that  the  rule  is  one  of  policy         .        .  137 

§  88.           (7)  The  rule  criticized 139 

§  89.     (II)  Mistake  by  payor  for  honor  as  to  genuineness  of 

drawer's  signature 139 

§  90.     (Ill)  Mistake  as  to  genuineness  of  payer's  signature         .  140 
§  91.     (IV)  Mistake  as  to  genuineness  of  bill  of  lading  attached 

to  draft 141 

§  92.    (V)  Effect  of  negligence 142 

CHAPTER  VI 


§93.    In  general 144 

§  94.    (I)  Misreliance  on  contract :  Assumption  of  risk  :  Mis- 
take of  law 146 

xii 


CONTENTS 

PAQB 

§  95.    (II)  Retention  of  benefit  inequitable  : 

(1)  When  defendant  defaults    .        .        .        ...        .147 

§  96.           Same  :  Effect  of  tender  of  specific  restitution      .        .  149 
§  97.           Same  :  Liability  of  purchaser  or  lessee  for  use  and 

occupation .        .        .  151 

§  98.        (2)  When  plaintiff  defaults 152 

§  99.           Same :  In  jurisdictions  where  contract  is  void    .        .  156 

§  100.    (Ill)  Right  to  restitution  when  neither  party  defaults     .  157 
§  101.    (IV)  Right  to  restitution  when  contract  enforceable  in 

equity 159 

§  102.        Same  :  Improvements  on  land  by  purchaser  or  lessee    .  161 
§  103.    (V)  Enforcement  of  restitution  not  against  policy :  Ad- 

missibility  of  parol  evidence  of  contract  .        .        .  163 

§  104.     (VI)  Measure  of  recovery  :  Contract  as  evidence  of  value  164 
§  105.        Same  :  May  value  of  thing  promised  by  defendant  be 

proved? 168 

§  106.        Same  :  Deduction  of  benefit  received  by  plaintiff  .        .  169 

§  107.        Same  :  Improvements  on  land 171 

§  108.    (VII)  Necessity  of  demand  :  Statute  of  limitations :  In- 
terest                ...  172 

CHAPTER  VII 

MISRELIANCE  ON  CONTRACT  UNENFORCEABLE 
BECAUSE  OF  IMPOSSIBILITY  OF  PERFORMANCE 

§  109.    In  general 174 

§  110.  Non-enforceability  may  result  from  prevention:  (1)  of 
plaintiff's  performance,  or  (2)  of  defendant's  perform- 
ance    175 

§111.    (I)  Plaintiff 's  performance  prevented  :  In  general    .        .  175 

§112.        (1)  Misreliance  on  contract :  Assumption  of  risk  .        .  175 

§113.           Same :  Presumption  rebuttable 176 

§114.           Same:  Effect  of  express  stipulation      ....  178 
§  115.        (2)  Receipt  of  benefit  by  defendant         .        .        .        .179 
§  116.           (a)  Destruction  of  building  in  course  of  improve- 
ment         179 

§117.              Same:  Upon  principle 182 

§  118.               Same:  Doctrine  of  Niblo  v.  Binsse    ....  184 
§  119.           (6)   Destruction  of  personalty  in  course  of  alteration 

or  repair 186 

§  120.  (c)   Loss  of  goods  in  course  of  carriage :  Disablement 

of  carrying  vessel 188 

§121.           (d)  Loss  of  vessel  in  course  of  seaman's  service  .        .  190 

xiii 


CONTENTS 

PAGE 

§  122.           (e)   Illness  or  death  of  contractor          .       .       .        .  191 

§  123.              Same :  Limitation  of  rule    .    ^  .       .        .        .        .  194 

§  124.           (/)  Act  of  government    . 194 

§  125.        (3)  Measure  of  recovery 196 

§  126.           Same :  In  case  of  insurance  contracts  ....  198 

§  127.    (II)  Defendant's  performance  prevented :  In  general       .  198 

§  128.        (1)  Recovery  of  prepaid  purchase  price  of  goods  or  land  199 

§  129.        (2)  Recovery  of  prepaid  freight 201 

§  130.        (3)  Enforcement   of   restitution  impracticable :   Part 

payment  of  unapportionable  consideration  .        .  204 
§  131.        (4)  Enforcement  of  restitution  unjust :  Change  of  posi- 
tion                                                                            ,  207 


CHAPTER  VIII 

MISRELIANCE  ON  ILLEGAL  CONTRACT 

§  132.    In  general 210 

§133.    (I)  Misreliance  on  contract :  Assumption  of  risk       .        .211 

§134.        Same  :  Mistake  of  law 211 

§  135.     (II)  Enforcement  of  restitution  against  public  policy        .  212 

§  136.        Same  :  Limitations  of  the  doctrine 214 

§  137.        (1)  Plaintiff  ignorant  of  the  fact  which  makes  contract 

illegal 215 

§  138.        (2)  Plaintiff  not  in  pari  delicto 215 

§  139.  Same  :  Classification  of  cases  in  which  plaintiff  is  not 

in  pari  delicto 217 

§  140.           (a)  Where  prohibition  is  aimed  at  defendant's  act    .  217 
§  141.           (6)  Where  plaintiff  is  induced  to  contract  by  fraud  or 

constraint 219 

§142.           Same:  The  doctrine  criticized       .        .        •-      .        .  222 

§  143.            Order  of  proof  as  test  of  par  delictum    ....  224 
§  144.        (3)  Plaintiff  withdraws  before  accomplishment  of  illegal 

purpose  :  Locus  pcenitentioe 226 

§145.           Same:  The  doctrine,  criticized       .       «•      •-      .        .  228 

§  146.           Same  :  Illegal  purpose  accomplished  in  part        .        .  229 

§  147.           Same  :  Illegal  purpose  thwarted 231 

§  148.     (Ill)  Illegal  transactions  by  agent :  Rights  of  principal    .  232 

§  149.     (TV)  Illegal  transactions  by  partner  :  Rights  of  copartner  234 

§  150.     (V)  Necessity  of  demand  :  Statute  of  limitations  :  Interest  235 
§  151.     (VI)  Certain  contracts  separately  considered  : 

(1)  Marriage  brokage  contracts 237 

§  152.        (2)  Wagering  contracts 239 

§  153.        (3)  Contracts  made  or  to  be  performed  on  Sunday        .  241 

xiv 


CONTENTS 

CHAPTER  IX 

MISRELIANCE  ON  ILLEGAL  CONTRACT  (Continued')  : 
ULTRA   VIRES  CONTRACTS  OF  CORPORATIONS 

PAOB 

§  154.    Two  views  of  ultra  vires  contracts 243 

§  155.    Difference  in  effect  between  the  two  doctrines  .        .        .  244 
§  156.    The  illegality  of  ultra  vires  contracts  peculiar  :  Do  general 

rules  apply  ? 244 

§  157.    The  right  to  restitution  : 

(1)  In  England 247 

§  158.  Same  :  The  English  doctrine  as  to  money  borrowed 

ultra  vires 247 

§  159.        (2)  In  the  United  States  Supreme  Court ....  250 

§  160.        (3)  In  the  State  courts 255 

§  161.    Enforcement  of   restitution  against  policy :    Ultra  vires 

contracts  of  municipal  corporations          ....  258 


CHAPTER  X 

MISRELIANCE  ON  CONTRACT  UNENFORCEABLE 
BECAUSE  OF  PLAINTIFF'S  BREACH 

§  162.    In  general 264 

§  163.     (I)  The  obligation  to  make  restitution  considered  upon 

principle 265 

§  164.        (1)  Misreliance  on  contract :  Assumption  of  risk    .        .  265 

§  165.           Same  :  Breach  of  condition  implied  in  law  .        .        .  267 
§  166.        (2)  Retention  of  benefit  inequitable  :  Effect  of  willful 

breach 269 

§  167.        Same  :  The  doctrine  of  Britton  v.  Turner         .        .        .  270 

§  168.            (a)  The  argument  as  to  inequality         ....  271 

§  169.            (b)  The  argument  as  to  injustice 272 

§  170.            (c)  The  argument  from  analogous  cases        .        .        .  272 

§  171.            (d)  The  argument  as  to  severability  of  contract .        .  273 

§  172.            (e)  Conclusion .                274 

§  173.     (II)  The  state  of  the  law                        274 

§  174.        (1)  Service  contracts 274 

§  175.        (2)  Building  and  like  contracts  ...'...  277 

§  176.        (3)  Contracts  for  the  sale  of  goods    .   "     .        .        .        .  280 
§  177.        (4)  Contracts  for  the  payment  of  money.        .        .        .281 

§  178.     (Ill)  Measure  of  recovery 282 

XV 


CONTENTS 


CHAPTER  XI 

MISRELIANCE  ON  SUPPOSED  REQUIREMENT  OF 
VALID  CONTRACT 

PAGE 

§  179.  In  general :  Mistake  as  to  terms  of  contract  or  fact  affect- 
ing obligation  to  perform  .......  286 

§  180.  The  right  to  recover  money  paid  in  performance  of  con- 
tract refonnable  in  equity 288 

§  181.  The  right  to  recover  money  paid  in  performance  of  parol 

contract  which  does  not  express  intuition  of  parties  .  291 

§  182.  The  right  to  recover  money  paid  by  drawee  of  negotiable 

paper  under  mistake  as  to  state  of  drawer's  account  .  292 


CHAPTER  XII 

MISRELIANCE  ON  NON-CONTRACT  OBLIGATION 

§  183.    In  general 294 

§  184.    Misreliance  on  duty  incident  to  status        ....    295 
§  185.    Misreliance  on  duty  of  executor  or  administrator      .       .    296 

CHAPTER  XIII 
MISRELIANCE  ON  OWNERSHIP  OF  PROPERTY 

§  186.    In  general 299 

§  187.     (I)  Improvement  of  real  property 299 

§  188.        Same  :  Upon  principle 303 

§  189.        Same  :  Measure  of  recovery 304 

§  190.     (II)  Improvement  of  personalty 304 

PART  II 

BENEFITS  CONFERRED  THROUGH  DUTIFUL 
INTERVENTION  IN  ANOTHER'S  AFFAIRS 

CHAPTER  XIV 

GENERAL  PRINCIPLES  AND  SUNDRY  INSTANCES 
OF  THE  OBLIGATION 

§191.    In  general        .        ...        . 308 

§192.     (I)  Dutiful  intervention        . 310 

xvi 


CONTENTS 

PAGE 

§  193.        (1)  The  discharge  of  another's  obligation        .        .        .  310 

§  194.            (a)  Actual  performance  a  matter  of  public  concern    .  310 

§  195.            (&)  Default  of  the  obligor 311 

§  196.            (c)  The  plaintiff  an  appropriate  intervenor  .        .        .311 
§  197.        (2)  The  preservation  of  life  or  property   ....  312 
§  198.     (II)  The  receipt  of  benefit  by  defendent      ....  312 
§  199.     (Ill)  Retention  of  benefit  inequitable  :  Gratuitous  inter- 
vention          313 

§  200.     (IV)  Sundry  instances  of  the  obligation       ....  314 

§201.        (1)  Preservation  of  life  :  Services  in  emergency      .        .  314 

§  202.        (2)  Necessaries  furnished  infant  or  insane  person  .        .  316 

§  203.        (3)  Necessaries  furnished  wife  or  children        .        .        .  317 

§  204.        (4)  Necessaries  furnished  pauper 318 

§  205.        (5)  Burial  of  the  dead 319 

§  206.        (6)  Preservation  of  property  :  Maritime  salvage    .        .  323 

§  207.            Same  :  Salvage  at  the  common  law       ....  326 

§  208.        (7)  Repairs  by  a  co-tenant         .  330 

§  209.        (8)  Performance  of  another's  contractual  duty       .        .  333 
§  210.        (9)  Performance  of  another's  statutory  duty  to  repair 

roads  .                                                                       .  334 


PART   III 
BENEFITS  CONFERRED  UNDER  CONSTRAINT 

CHAPTER  XV 

CONSTRAINT  OF  DURESS 

§  211.    In  general 336 

§212.     (I)  What  constitutes  duress          .        .        .  .        .337 

§  213.     (II)  Sundry  instances  of  obligation,  classified  according 

to  means  of  compulsion  employed    ....  338 

§  214.        (1)  Violence  or  imprisonment :  Duress  of  person  .        .  338 

§  215,        (2)  Threat  of  legal  proceedings 339 

§  216.        (3)  Seizure  or  detention  of  personal  property         .        .  340 
§  217.        (4)  Assertion  of  fictitious  lien  on  real  property  or  re- 
fusal to  discharge  valid  lien 344 

§  218.        (5)  Injury  to  business 346 

§  219.        (6)  Oppressive  refusal  to  discharge  a  duty  : 

(a)  Illegal  fees  of  public  officers 348 

§  220.           (6)  Illegal  charges  of  public  service  corporations        .  350 

§  221.              Same :  Necessity  of  protest 352 

xvii 


CONTENTS 

PAGB 

§  222.        (7)  Oppressive  refusal  to  loan  money  at  legal  rate  of 

interest .    353 

§  223.  Same  :  Right  to  recover  usury  :  Upon  principle        .    355 

§  224.  Same  :  Right  to  recover  from  assignee  of  usurer        .    357 

§  225.  Same  :  Right  to  recover  before  principal  and  legal 

interest  are  paid 358 

§  226.  Same  :  Right  of  debtor  to  have  usurious  interest 

applied  in  diminution  of  principal    ....    358 
§  227.  Same  :    Recovery   of   usurious  interest  under  Na- 

tional Bank  Act  .  .    360 


CHAPTER  XVI 

CONSTRAINT  OF  LEGAL  PROCEEDINGS 

§  228.    (I)  Constraint  of  commencement  of  action        .        .       .  362 
§  229.     (II)  Constraint  of  judgment : 

(1)  In  general :  Res  judicata 363 

§  230.        (2)  Void  judgment 368 

§  231.        (3)  Judgment  satisfied  but  not  discharged     .        .        .  368 
§  232.        (4)  Judgment  subsequently  reversed       ....  368 
§  233.           Same  :  Recovery   by  person  other  than  the  judg- 
ment defendant 370 

§  234.            Same  :  Recovery  from  whom 370 

§  235.  Same :  Measure  of  recovery  .        .        .       .       .        .371 

§  236.           Same :  Reversal  on  technical  grounds  .        .       .       .  373 

CHAPTER  XVII 

CONSTRAINT  OF  TAX  OR  ASSESSMENT 

§  237.    In  general :  Vacation  or  correction  of  tax  or  assessment 

as  condition  precedent  to  right  of  action      •  t  -     .        .  374 
§  238.    (I)  What  constitutes  restraint  in  collection  of  tax  or  as- 
sessment ? 

(1)  Duress  of  person  or  goods  .        »       .       .        .       .  376 

§  239.        (2)  Sale  of  real  property  :  Cloud  on  title        .       .        .  379 

§  240.        (3)  Incumbrance  of  property    ......  382 

§  241.        (4)  Prevention  of  recordation  of  deed      ....  383 

§  242.        (5)  Interference  with  business  :  Onerous  penalties        .  384 

§  243.     (II)  Retention  of  benefit  inequitable                  *  387 

§  244.    (Ill)  Necessity  of  protest :  Interest    .       .       .       .        .  388 

§  245.     (IV)  Demand  and  notice      .        .       .       . "      .       .       .389 

§246.     (V)  Statutory  remedy »       .       .389 

xviii 


CONTENTS 


CHAPTER  XVIII 

CONSTRAINT  OF  AN  OBLIGATION  WHICH,  IN" 
WHOLE  OR  IN  PART,  DEFENDANT  OUGHT 
TO  HAVE  DISCHARGED 

PAGE 

§  247.    In  general 391 

§  248.     (I)  Discharge  of  defendant's  obligation  to  prevent  sale  of 

plaintiff's  property 392 

§  249.          Same  :  England  v.  Marsden,  Edmunds  v.  Wallingford  393 
§  250.         Same  :  Must  seizure  of  plaintiff's  property  be  lawful?  394 
§  251.     (II)  Discharge  of  defendant's  obligation  by  sale  or  sacri- 
fice of  plaintiff's  property 395 

§  252.     (Ill)  Discharge  of  defendant's  obligation  by  plaintiff  as 

co-obligor :  In  general 396 

§  253.        (1)  Right  of  surety  to  indemnity 396 

§  254.        (2)  Right  of  surety  to  contribution 398 

§  255.        (3)  Right  of  tort-feasor  to  contribution  ....  401 

§  256.  Same  :  Limits  of  rule 402 

§  257.  Same  :  Upon  principle 406 

§  258.        (4)  Right  of  tort-feasor  to  indemnity       ....  406 
§  259.        (5)  Nature  of  the  tort-feasor's  right  to  indemnity  or 

contribution  ....  409 


PART  IV 

ACTION  FOR  RESTITUTION  AS  ALTERNATIVE 
REMEDY  FOR  REPUDIATION  OR  BREACH 
OF  CONTRACT  AND  FOR  TORT 

CHAPTER  XIX 

ACTION  FOR  RESTITUTION  AS  ALTERNATIVE 
REMEDY  FOR  REPUDIATION  OR  BREACH 
OF  CONTRACT 

§  260.    In  general :  Is  the  obligation  quasi  contractual  ?       .        .    410 

§  261.     (I)  Origin  of  the  doctrine 411 

§262.     (II)  Scope  of  the  doctrine  : 

(1)  Limited  application  to  cases  of  goods  sold  or  services 

rendered 412 

xix 


CONTENTS 

PAQB 

§  263.        (2)  Application  to  cases  of  repudiation  and  to  cases  of 

substantial  breach 417 

§  264.        (3)  Application  to  cases  of  contracts  under  seal     .        .  420 
§  265.     (Ill)  Restitution  by  plaintiff  as  condition  precedent        .  422 
§  266.     (IV)  What  constitutes  an  election       .....  427 
§  267.     (V)  The  necessity  of  notice  or  demand  :  Statute  of  lim- 
itations        . .        .  428 

§  268.    (VI)  Measure  of  recovery 430 

§  269.        Same  :  Effect  of  settlement  or  payment  pro  tanto  .        .  434 


CHAPTER  XX 


§  270.    In  general :  Is  the  obligation  quasi  contractual  ?       .       .  437 
§  271.    (I)  Essential  elements  of  the  obligation  : 

(1)  The  commission  of  a  tort    .        .        .        .        .        .  438 

§  272.        (2)  The  receipt  of  a  benefit  by  the  tort-feasor       .        .  439 

§273.            Same  :  Must  benefit  consist  of  money  received?         .  439 
§  274.            Same :  Must    benefit    consist    of    something   taken 

from  injured  party? 441 

§  275.            Same :  The  taking  of  intangible  things         .        .        .  442 

§  276.    (II)  Application  of  doctrine  to  particular  torts .        .        .  445 
§  277.        (1)  Conversion    .        .        .                .      ,  .        .        .        .446 

§  278.            Same :  Goods  obtained  by  fraud    .        .        .        .  447 

§  279.           Same  :  Goods  or  money  received  from  a  converter     .  450 

§  280.           Same  :  Goods  used  and  returned 451 

§  281.        (2)  Deceit 452 

§  282.           Same  :  Inducing  void  marriage  by  false  representa- 
tions     .        .        .        ....'- 453 

§  283.        (3)  Trespass  on  land 455 

§  284.           Same  :  Use  and  occupation 455 

§  285.        (4)  Abduction  of  child  or  servant :    Inducing  breach 

of  contract 457 

§  286.        (5)  False  imprisonment :  Service  under  compulsion      .  458 

§  287.        (6)  Usurpation  of  office     ........  459 

§  288. ,       (7)  Infringement  of  patent  rights 460 

§  289. .    (Ill)  The  liability  of  joint  tort-feasors        .        ...       .        .  461 

§  290.     (IV)  Rights  of  owners  in  common       .        .        .        .        .  462 

§  291.     (V)  Infancy  or  insanity  as  a  defense  or  in  mitigation       .  463 

§292.    (VI)  Measure  of  recovery .        .        .        .  463 

XX 


CONTENTS 

PAQB 

§  293.        Same  :  Interest 465 

§  294.  (VII)  Statute  of  limitations .        .        .        .    '•    .       .       .466 

§  295.  (VIII)  Effect  of  judgment  against  one  of  two  tort-feasors  470 

§  296.  (IX)  Effect  of  judgment  in  favor  of  one  of  two  alleged 

tort-feasors 472 

§  297.  (X)  Effect  of  satisfaction  by  one  of  two  tort-feasors         .  473 

§  298.     (XI)  What  constitutes  an  election 473 

§  299.  Same  :  The  case  of  joint  tort-feasors        ....  476 

§  300.  Same  :  The  case  of  successive  converters         ...  476 

INDEX    .        .  .    479 


XXI 


TABLE   OF  CASES 


[References  are  to  Sections] 


Abbe  P.  Marr  135 

Abbey  v.  Chase  73 

Abbot  P.  Town  of  Fremont     286,  292 
Abbott  v.  Draper          32,  98,  103,  108 
v.  Inskip  98 

Abbotts  v.  Barry  278 

Abell  v.  Penn  Mutual  Life  Ins. 

Co.  124,  126 

Abendpost  Co.  v.  Hertel  174 

Aberdeen,  The  206 

Acers  v.  Curtis  254 

Acheson  v.  Miller  256 

Ackerman  v.  Lyman  284 

Ada  County  v.  Gess  40 

Adams  v.  Beall  69 

v.  Gay  153 

v.  Irving  Nat.  Bank  214 

v.  Kells  189 

v.  Mahnken  226 

Adams,  Matter  of,  v.  Super- 
visors 246 
Adamson  v.  Jarvis  258 
Adkins  ».  Flemming  152 
Adsit  v.  Kaufman  284 
Advertiser,  etc.,  Co.  v.  City  of 

Detroit  15 

.<Etna  Ins.  Co.  v.  Mayor,  etc.,  of 

New  York,  7  App.  Div.  43 

153  N.Y.  237,  240,  245 

.33tna   Iron   Works   v.   Kossuth 

County  175,  178 

Agawam   Nat.   Bank   v.   South 

Hadley  161 

Aglaia,  The  206 

Aiken  ».  Peay's  Extra.  254 

v.  Short  18,  19 

Akerblom  r>.  Price  206 

Alabama  Nat.  Bank  t>.   Rivers     279 

Alamo,  The  200 

Albany,  City  of,  c.  McNamara       46 

Albea  v.  Griffin  101,  102 

Aldine  Mfg.  Co.  c.  Barnard  273 

Aldrich  v.  Aldrich  253 

v.  Chemical  National  Bank         159 

v.  Wood  224 


Alexander  v.  Fisher  185 

v.  Mount  152 

Alfree  Mfg.  Co.  v.  Grape  265 

Allcard  v.  Walker  38 

Alleghany  County  v.  Grier  40 

Allen  v.  Burlington  238 

v.  Burns  175 

v.  Ford  278 

v.  McKibben  178 

v.  Sharpe  90 

Allison  v.  Barrett  224 

v.  Bristol  Insurance  Company  129 

Alston  v.  Durant  216,  219 

Alton  v.  First  Nat.  Bank  15,  22,  35,  42 

Ambrose  v.  Kerrison  205 

American  Bank  v.  Mumford  238- 

American   Bapt.    Missy.    Union 

v.  Hastings  239 
American  Bell  Tel.   Co.  c.  Al- 
bright 295 
American  Express  Co.  v.  State 

Nat.  Bank                               80,  88 
American  Insurance  Co.  v.  John- 
son 206 
American  Life  Ins.  Co.  v.  Mc- 

Aden  262,  264,  265 

American  Mutual  Life  Insurance 

Company  v.  Bertram  141 
American    Nat.    Bank   v.    Nat. 

Wall  Paper  Co.  159 
American  Soda  Fountain  Co.  v. 

Vaughn  128 
American     Steamship     Co.     v. 

Young  219 

Ames  v.  Ames  93 

Amory  v.  Flyn  207 

Amsinck  v.  Amer.  Ins.  Co.  66 

Anderson  v.  Haskell  263 

v.  Reid  187 

v.  Rice  262 

v.  Saylors  256 

v.  Todd  175 

Anderson,  City  of,  v.  Fleming  296 

Anderson  Co.  v.  Pungs  278 

Andrew  v.  St.  Olave's  Board  of 

Works  215 


XX111 


TABLE   OF   CASES 


[References  are  to  Sections] 


Andrews  r.  Murray  256 

Andrus  c.  Foster  51 
Anglo-American  Land,  etc.,  Co. 

«.  Lombard  160 
Anglo-Egyptian  Navigation  Co. 

v.  Rennie  112 
Anglo-Wyoming    Oil    Fields  v. 

Miller  262 

Angus  v.  Scully  116 

Ankeny  v.  Clark                         262,  265 

v.  Moffett  256 
Anonymous 

2  Show.  129 

1  Str.  261 

Anstee  v.  Ober  174 

Appleby  v.  Dods               112,  114,  121 

v.  Myers                          112,  116,  119 

Appleton  v.  Bascom  253 

v.  Citizens  Nat.  Bank          159,  160 
Appleton  Bank  v.  McGilvray  15 
Arkansas,  etc.,  R.  Co.  ».  Lough- 
ridge  201 
Armstrong  v.  Ashley  187 

v.  Jackson  d.  Elliott  187 
Armstrong  County  v.   Clarion 

County  256 

Arnold  v.  Clifford  256 

c.  Georgia  R.  &  B.  Co.  220 

Arnold  Co.,  In  re  141 
Arnold   &   DuBose  r.   Georgia, 

etc.,  Co.  39 

Arnot  v.  Pittston,  etc.,  Co.  146 

Arris  v.  Stukely  287 

Arthur  &  Co.  v.  Blackman  128 

Ash  v.  McLellan  15 

Ashbury  R.,  etc.,  Co.  v.  Riche  154 

Asher  v.  Cornett  283 

Ashley  v.  Jennings  22 

v.  Lehigh,  etc.,  Coal  Co.  258 

Ashmole  v.  Wainright  216 

Ashurst  v.  Field's  Admr.  34 

Astley  v.  Reynolds                   216,  222 

Atchison,  etc.,  R.  Co.  c.  Commrs.  238 

v.  O'Connor  24 

Atkins  v.  Johnson  256 

Atkinson  c.  Denby  141 
Atlanta,  etc.,  R.  Co.  ».  Southern, 

etc.,  Co.  256 

Atlanta  Sav.   Bank  v.   Spencer  226 
Atlantic  Coast  Line  R.  Co.  c. 

Schirmer  25 

Atwater  v.  Manville  149 

c.  Tupper  295 

Atwell  v.  Gowell  224 

v.  Zeluff                                   238,  244 


Auditor  ».  Ballard  46 

Auditors  c.  Benoit  287 

Auerbach  v.  Salt  Lake  County  161 
Aull  Savings  Bank  c.  Aull  284 

Aultman  &  Taylor  Co.  v.  Mead  265 
Austin,  etc.,  R.  Co.  v.  Faust  258 
Auxer  v.  Llewellyn  152 

Avery  v.  Central  Bank  256 

Avery  &  Sons  v.  McClure  275,  288 
Ayer  v.  Ashmead  297 

Ayland  v.  Rice  46 

Axtel  v.  Chase  266,  267 

B 

Babcock  v.  Thompson  141,  152 

Bacon  v.  Cottrell  187 

v.  Moody  266,  298 

v.  Parker  68 

v.  Thornton  189 

Badeau  v.  United  States  40 

Badger  v.  Phinney  69 

Bailey  v.  Bishop  248 

v.  Buell  230 

v.  Bussing  255,  256,  258 

v.  Devine  214 

v.  Goshen  238 

v.  Marden  268 

Baird  v.  Howard  278 

Baker  v.  Higgins  176 

v.  Hutchinson  298 

•c.  Meisch  190 

v.  Oughton  203 

Baldwin  t>.  Bohl  284 

v.  Burrows  72 

v.  Inhabitants  of  Prentiss  161 

v.  Liverpool,  etc.,  S.  S.  Co.         216 
v.  Patter  148 

Ball  v.  Shepard  19,  25 

v.  Ward  214 

Ballou  v.  Billings  262,  263,  264 

Balls  v.  Raines  234 

Baltimore,    etc.,  R.    Co.    v.    Dia- 
mond Coal  Co.  143 
v.  Faunce                                 15,  179 
r.  Howard  County                         258 
Baltimore,  Mayor,  etc.,  of,  r.  Lef- 

ferman  215,  238 

Bank  v.  Lutterloh  226 

Bank  of  Charleston  v.  Bank  of 

State  279 

Bank  of  Chillicothe  v.  Dodge  43 
Bank  of  Columbia  v.  Patterson  262 
Bank  of  Commerce  v.  Union 

Bank  80,  92 


XXIV 


TABLE   OF   CASES 


(References  are  to  Sections] 


Bank     of     Commonwealth     v. 

Mayor,  etc.,  of  N.  Y.  238 
Bank  of  St.  Albans  v.  Farmers', 

etc.,  Bank  31,  80,  85,  87,  92 

Bank  of  Toronto  v.  Hamilton  25 
Bank  of  United  States  v.  Bank  of 

Washington  234 
Bank  of  Williamson  v.  McDowell 

County  Bank  83,  92 

Banker  v.  Henderson  104 

Bankers'  Life  Assn.  v.  Commrs.  246 

Bannatyne  v.  Maclver  72 

Bannister  v.  Reed  263 

Barber  v.   County  of  Jackson  246 

Barclay  v.  Pearson  140 

Barnes  v.  Barnes  202 

v.  Gushing  254 

v.  District  of  Columbia  40 

v.  Shoemaker  54 

Barnet  v.  Muncie  Nat.  Bank  227 

Barnett  v.  Sweringen  262 

Barney  v.  Grover  253 

Baroness  Wenlock  v.  River  Dee 

Co.  158 

Barr  v.  Logan  262 

Bartholomew  v.  Jackson  50,  207 

v.  Markwick  262 

Bartle  v.  Nutt  135,  149 

Bartlett  v.  Bellgard  280 

v.  First  Nat.  Bank  80 

v.  Lowell  161 

c.  Turchin  262 

Bassett  v.  Bassett  95,  105 

v.  Brown  23 

Batard  v.  Hawes  254 

Bateman  v.  Robinson  140 

Bates  v.  N.  Y.  Ins.  Co.  216 

Bates-Farley  Sav.  Bank  v.  Des- 

mukes  277 

Bath  Gas  Light  Co.  v.  Claffy  160 

Battersey's  Case  255 

Baum  v.  Thorns  222 

Baxter  v.  Earl  of  Portsmouth  202 

v.  Gray  48 

Bayley  v.  Rimmell  122 

Bayne  v.  United  States  279 

Beach  v.  Guaranty  Sav.  Assn.  222 

Beadles  v.  Blees  152 

Beam  v.  Copeland  28 

Bean  v.  Middlesboro  238 
Beard  v.  Beard                    35,  228,  232 

Beaty  v.  Bordwell  208 

Bechtel  v.  Chase  278 

Beckwith  v.  Frisbie  207 

Bedier  v.  Fuller  27X 


Bedow  v.  Tonkin  174,  178 

Beed  v.  Blandford  265 

Beede  v.  Lamprey  190 

Beeler  v.  Young  202 

Behring  v.  Somerville  25 

Bell,  The  Heather  248 

Bell  v.  Bank  of  California  294 

v.  Ellis  98 

v.  Kirkland  161 

v.  Rice  51 

Bello  Corrunes,  The  206 
Belloff  v.  Dime  Savings  Bank           35 

Bellows  v.  McCartee  187 

Bender's  Admrs.  v.  Bender  102 

Benham  v.  Emery  74 

Bennett  v.  Bates  17 


v.  Ford 

v.  Healey 
Benson  v.  Cowell 

v.  Monroe 
Bentley  v.  Smith 


216 
217 
265 

228,  242,  244 
98 


Benton  v.  Singleton  148 

Bergmeyer  v.  Greenup  County  242 
Berkshire  Glass  Co.  v.  Wolcott  279 
Bernard  v.  Dickens  262 

v.  Taylor  144,  152 

Bernheimer  v.  Marshall  80,  83,  89 
Bernier  v.  Cabot  Mfg.  Co.  98 

Bertrand  v.  Byrd  175 

Bethel  v.  Booth  95 

Bettis  v.  McNider  277,  279 

Betts  v.  Gibbons  258 

11.  Village  of  Reading,  215,  238 

Beveridge  v.  West  Side  Const. 

Co.  177 

Bexar  Building  Asso.  v.  Robin- 

son 222 

B.  F.  Avery  &  Sons  v.  McClure 

275,  288 

Bibb  v.  Hunter  127 

Bickerstaff  v.  Dellinger  235 

Bickett  v.  Garner  236 

Bicknell  v.  Wilder  School  Town- 

ship 75,  79 

Bier  v.  Bash  262 

Bigelow  v.  Chicago,  etc.,  R.  Co.      160 

v.  Jones  283 

v.  Old  Dominion,  etc.,  Co.  256 

Biggerstaff  v.  Rowatt's  Wharf  262 
Bilbie  v.  Lumley  16,  35,  36 

Billings  v.  Hall  187 

o.  Inhabitants  of  Monmouth 

72,  75,  76 

v.  McCoy  Brothers  179 

Bingham  v.  Sessions  216 


TABLE   OF   CASES 


[References  are  to  Sections] 


Binion  p.  Browning  95 

Bink  P.  Wood  229 
Binz  P.  National  Supply  Co.  124, 125 

Bird  v.  Munroe  66 

Birkenhead  Union  v.  Brookes  46 

Bishop  v.  Brown  32 

p.  Minderhout  128 

Bishop's  Estate,  In  re  51 

Bissel  v.  R.  Co.  156 
Bize  v.  Dickason  22,  35,  179 
Black  v.  Supr.  Council,  Amer. 

Legion  of  Honor  262,  265 

Blackburn  v.  Reilly  263 

v.  Smith  265 
Blackburn   Building   Society  v. 

Cunliffe  158 
Black  Lick  Lumber  Co.  v.  Camp 

Const.  Co.  72 

Blain  v.  Willson  222 

Blaireau,  The  206 

Blakely  v.  Muller  131 

Blanchard  p.  Blanchard  253 

Blann  v.  Crocheron  295 

Block  v.  Darling  146 

Blood  v.  Wilson  175 
Bloomsburg  Land  Imp.  Co.  v. 

Bloomsburg  161 

Bluemner  v.  Garvin  64 
Board  of  Commrs.  P.  City  of 

Bloomington  40 

v.  Denebrink  204 

v.  Dorsett  254 

v.  Gregory  15 

p.  Heaston  40 

v.  Patrick  40 

p.  Rhode  287 
Board   of   Commrs.   of  Pulaski 

County  P.  Senn  246 

Board  of  Supervisors  P.  Ellis  40 

p.  Gilbert  204 
Board  of  Trustees  P.  Board  of 

Education  37 

Boardman  P.  Ford  52 

v.  Ward  184 

Boas  P.  Updegrove  25 

Boddie  P.  Brewer  Brewing  Co.  135 
Boeker  p.  Crescent  Belting,  etc., 

Co.  265 

Bohart  v.  Oberne  72 

Bolton  P.  Prentice  203 

Bomberger  p.  Turner  187 

Bond  P.  Aitkin  73 

p.  Coats  35 

p.  Hays  13 

c.  Terrell,  etc.,  Mgf.  Co.  160 


Bone  P.  Eklesa  148 

Bonnel  P.  Foulke  35,  183 
Bonnette  p.  St.  Louis,  etc.,  R.  Co.  201 

Bonnon's  Estate  p.  Urton  105 

Boody  P.  McKenney  69 

Booker  p.  Wolf  95 

Booth  p.  Tyson  174 

Borden,  The  Holder  206 

Bosanquett  P.  Dashwood  222 

Boston  P.  Coon  258 
Boston  and  Sandwich  Glass  Co. 

p.  Boston  238,  244 

Boston,  etc.,  Ins.  Co.  P.  Hendricks  242 
Boston,  etc.,  R.  Co.  P.  State         244 

Boston  Ice  Co.  v.  Potter  54,  56 

Bostwick  P.  Bostwick  51 

Boulton  P.  Jones  56,  58 

Bowen  p.  Kimbell  175 

p.  Phillips  226 
Bowker  p.  Hoyt                          176,  178 

Bowles's  Case  208 

Bowman  p.  Browning  273 

p.  Wade  95 

Boyce  p.  Wilson  180 

Boyd  P.  Emmerson  182 

Boyer  P.  Bolender  256 

p.  Bullard  273 
Boyle  P.  Staten  Island,  etc.,  Land 

Co.  277 
Boylston  Bank  p.  Richardson          182 

Boyter  P.  Dodsworth  287 

Brabo,  The  206 

Bradbury  v.  Place  70 

Bradley  v.  Burwell  254 

p.  Levy  262 

p.  Pratt  202 

p.  Rosenthal  258 

Bradshaw  P.  Vanvalkenburg  224 

Brady  p.  Horvath  148 

Braithwaite  p.  Aiken  273 

Brand's  Extr.  p.  Brand  205 

Brandeis  P.  Neustadtl  99 

Brandner  p.  Krebbs  201 

Brands  P.  Louisville  37 

Branham  p.  Stallings  135 

Branston,  The  206 

Brashear  p.  Rabenstein  95 

Brawner  p.  Franklin  69 

Brazee  p.  Bryant  153 

Bremen,  The  206 

Brennan  p.  Gallagher  150 

Brewer  P.  Herbert  128 

'    P.  Sparrow  298 

Brewster  p.  Burnett  23,  60 

p.  Wooster  265 


XXVI 


TABLE    OF   CASES 


[References  are  to  Sections] 


Bridge  v.  Hubbard 
Bridges  v.  McAllister 
Bright  v.  Boyd 

v.  Halloman 

v.  Lennon 


224 
235 

187 
238 
254 


Brightman  Bros.  v.  Griffin  &  Co.       56 
Brinsmead  v.  Harrison  289,  295 

Brisbane  v.  Dacres  29,  35 

Bristol  v.  Button  104 

Bristol,    Town   of,   v.    Town   of 

New  Britain  204 

Bristow  v.  Eastman  291 

Britain  v.  Rossiter  66,  93 

British,  etc.,  Ins.  Co.  v.  Southern 

Pacific  Co.  120 

Brittain  v.  Lloyd  252 

Britton  v.  Turner  167,  168,  169,  170, 

171,  174,  175 

Broadnax  v.  Ledbetter  46 

Brooks  v.  Hall  17,  18 

v.  Martin  149 

v.  Scott  262 

Brown  ».  City  of  Atchison  160 

v.  College  Corner,  etc.,    Road 

Co.  15 

v.  East  102 

v.  Everett,  etc.,  Co.  141 

•c.  Fitch  176 

v.  Foster  273 

v.  Harris  129 

v.  Hodgson  252 

v.  Lee  254 

v.  Mclntosh  222,  223 

v.  Mahurin  262 

v.  Randolph  98 

v.  St.  Paul,  etc.,  R.  Co.        262,  266 

v.  Tillinghast  15 

•v.  Timmany  144,  153 

v.  Tuttle  46 

v.  Witter  265 

v.  Woodbury  262,  263,  265 

v.  Wootton  295 

Browning  v.  Morris  135,  138,  140 

Brownlee  v.  Marion  County  237 

Bruce  v.  Indianapolis  Gas  Co.         130 

Bruecher  v.  Village  of  Port  Chester  245 

Brumagim  v.  Tillinghast  35 

Brumby  v.  Smith  116 

Brummitt  v.  McGuire  15 

Brundage  v.  Burke  222,  226 

Brundred  v.  Rice  279,  281,  289 

Bruner  v.  Stanton  37 

Brunswick    Gas    Light    Co.    ». 

United  Gas  Co.  154,  160 

Bryan,  City  of,  v.  Page  161 


Bryant  v.  Fairfield  235 

Bryant's  Estate,  In  re  207 

Buchanan  v.  Pue  185 

Buck  v.  Pond  64 
Buckeye  Marble  Co.  v.  Harvey  154 

Buckland  v.  Johnson  295 

Buckley  v.  Mayor  of  N.  Y.  238 

v.  Wood  64 

Buel  v.  Boughton  22 

Buffalo  v.  O'Malley  18 

Buford  v.  Lonergan  216 

Buller  v.  Harrison  27 

Burge  v.  Ashley  &  Smith  152 

Burgin  v.  Smith  161 

Burke  v.  Gould  217 
Burkholder  v.  Beetem's  Admrs.     140 

Burnley  v.  Tufts  128 

Burrows  v.  Ward  184 

Burton  v.  Driggs  281 

v.  McMillan  214 

Burton  Lbr.  Co.  v.  Wilder  277 

Burwell  v.  Jackson  63 

Bush  v.  Finucane  175 

Butcher  v.  Carlile  262 

v.  Henning  234 

Butler  v.  Agnew  143 

v.  Kemmerer  64 
Butt  v.  Smith  180 
Butterfield  v.  Byron  116,  127 
Button  v.  Thompson  164 
Butts  County  v.  Jackson  Bank- 
ing Co.  161 
Byard  v.  Holmes  281 
Byerlee  v.  Mendal  174,  178 
Byrd  v.  Boyd  174 
Byrne  v.  Schiller  129 


Cadman  v.  Markle  95 

Cadoval  v.  Collins  214 

Cahaba  v.  Burnett  35 

Caldwell  v.  Dawson  179 

v.  Harding  148 
Calkins  v.  Griswold                     17,  179 

Callahan  v.  Shotwell  130 

Calland  ».  Lloyd  279 

Callehan  v.  Stafford  174 

Callender  v.  Ins.  Co.  of  N.  A.  120 

Calvert  v.  Aldrich  208 

Cambriozo  v.  Maffet  135 
Camden,   etc.,   R.   Co.   v.   May's 

Landing,  etc.,  R.  Co.  160 

Campbell  v.  Clark  35 

v.  District  of  Columbia  262 


XXVJ 1 


TABLE    OF   CASES 


[References  are  to  Sections] 


Campbell  v.  Kauffman  Milling  Co.  232 

v.  Mesier  208 

v.  Phelps  295 

v.  Richardson  152 

Campbell  Mfg.  Co.  v.  Marsh  262,  265 

Canadian  Bank  of  Commerce  v. 

Bingham  92 

Canal  Bank  v.  Bank  of  Albany 

27,  80,  92 

Cann  ».  Cann  51 

Canton  v.  Torrance  258 

Capella,  Cargo  ex  206 

Capella,  The  206 

Capitol  Gas  Co.  v.  Gaines  37 

Caponigri  v.  Altieri  227 

Capps  ».  Holt  101 

Cardinal  v.  Hadley  180 

Carew  v.  Rutherford  218 

Cargo  ex  Capella  206 

Cargo  ex  Port  Victor  206 

Carlisle  v.  Barker  17 

v.  Rich  253 

Carney  v.  Newberry  263,  267 

Carpenter  v.  Lingenfelter  190 

v.  Northborough  Nat.  Bank  80 

v.  Southworth  41 

v.  Weller  51 

Carroll  v.  Fethers  298 

v.  Welch  174,  175,  178 

Carson  v.  Allen  262 

v.  McFarland  185 

Carson  River  Lumbering  Co.  ». 

Bassett  273 

Carter  v.  Beck  180 

D.  Brown,  35  Neb.  187 

3  S.  C.  95,  105 

v.  Carusi  222,  226 

c.  Farthling  226 

v.  First  Ecclesiastical  Society      229 

c.  Fox  262,  263 

v.  Iowa,  etc.,  Loan  Assn.  17 

Carthage,  School  Town  of,  r>.  Gray  122 

Case  v.  Hammond  Packing  Co.     279 

Caswell  v.  Hazard  204 

Catlin  v.  Allen  234 

v.  Tobias  176 

Catoir  v.  Watterson  242 

Catterlin  v.  Somerville  231 

Catts  v.  Phalen  141 

Caze  v.  Baltimore  Ins.  Co.  120 

Cazenove  v.  Cutler  217 

Centennial  Eureka  Min.  Co.  v. 

Juab  County  246 

Central  Mills  Co.  o.  Hart  284 

Central  Nat.  Bank  v.  Haseltine    227 


Central   of   Georgia   R.   Co.   v. 

Macon  R.  &  Light  Co.  256 
Central     Paving     Co.     v.     Mt. 

Clemens  161 
Central    Transportation    Co.    v. 

Pullman's,  etc.,  Co.          154,  159 

Cernahan  v.  Chrisler  280 

Chaffec  v.  Jones  254 

Chamber  of  Commerce  v.  Sollitt  263 

Chamberlin  v.  Scott  268 

Chambers  ».  Miller                      19,  182 

v.  R.  Co.  158 

v.  Union  Nat.  Bank  80,  88 

Chamblee  v.  Baker  174 

Champlin  v.  Rowley  176 

Chandler  v.  Sanger  216 

v.  Simmons  69 

v.  Webster  131 

Chanters  v.  Leese  62 

Chapin  v.  Thompson  224 

Chapman  v.  County  of  Douglas  161 

v'.  Haley                                   135,  144 

v.  Rich                                        95,  106 

v.  Sutton  232 

Chariton  County  v.  Hartman  46 

Charles  D.  Lane,  The  121 

Charles  E.  Soper,  The  206 

Charlestown  v.  Hubbard  46 

Chase  v.  Alliance  Ins.  Co.  129 

v.  Corcoran  207 

v.  Dwinal  216 

Chateau  v.  Singla  149 

Chatfield  v.  Paxton  16 

Cheek  v.  Iron  Belt  Bldg.  Asso.  222 

Cheeseborough  v.  Green  208 

Cherry  Valley    Iron    Works    v. 

Florence  Iron  Co.  177 

Chesebrough  v.  United  States  244 

Chester,  The  City  of  206 

Chester  c.  Underbill  46 

Chestnut  v.  Harbaugh  153 

Cheuvont  v.  Horner  148 
Chewaela  Lime  Works  v.   Dis- 

mukes                                 154,  160 

Chicago,  City  of,  v.  Fidelity  Bank  238 

v.  Klinkert  238 

».  McKechney  161 

v.  Northwestern     Mut.     Life 

Ins.  Co.  218 

v.  Sexton                                  268,  269 

v.  Tilley  262 

v.  Waukesha  Brewing  Co.  242 

Chicago,  etc.,  R.  Co.  ».  Adams  232 

v.  Chicago,  etc.,  Coal  Co.  220 

v.  Davis  201 


XXV)  11 


TABLE    OF   CASES 


[References  are  to  Sections] 


Chicago,  etc.,  R.  Co.  t>.  Derkes        160 
Chicago  Railway,  etc.,  Co.  v.  Mer- 
chants' Bank  128 
Chieftain,  The                                     206 
Childress  v.  Emory  2 
p.  Vance                                            248 
'   Childs  v.  Shower                                 187 
•o.  Smith                                            248 
Chipman  v.  Morrill                            254 
Choteau  v.  Jones                                253 
Churchill  v.  Holt                                 258 
Cicotte  v.  Church  of  St.  Anne           46 
Cilley  v.  Burkholder                           101 
Cincinnati,  etc.,  R.  Co.  v.  Hamil- 
ton County                                  238 
Cincinnati  Township  v.  Ogden       204 
Citizens'  Bank  v.  City  of  Spencer     161 
v.  Rudisill                              13,  14,  25 
v.  Schwarzschild                              182 
Citizens'  Nat.  Bank  v.  Appleton     159 
City  Bank  v.  First  Nat.  Bank     80,  92 
City  Nat.  Bank  v.  Burns                '  182 
v.  Nat.  Park  Bank                         289 
v.  Peed                                                15 
City  of  Chester,  The                         206 
City  of  Puebla,  The                           206 
Civil  Service  Co-op.  Society  v.       ' 

General  Steam  Nav.  Co.  131 

Clabbon,  In  re  46 

Claflin  v.  McDonough  238 

Clancy  v.  Button  216 

Clarance  v.  Marshall  284 

Clarita,  The  206 

Clark  v.  Baker  265 

v.  Busse  116 

c.  Collier  116 

v.  Davidson  107 

v.  Eckroyd  25 

v.  Fairchild  262 

v.  Franklin  116 

v.  Gilbert  122,  125 

v.  McCleery  262 

v.  Manchester  265,  268,  269 

v.  Moore  176,  178 

v.  Pinney  232 

v.  Plummer  208 

v.  Terry  104 

Clarke  v.  Commrs.  of  Stearns  Co.  237 

v.  Butcher  35 

v.  Shee  222,  279 

Clary  t>.  Clary  48 

Clay  v.  Clay  229 

v.  Yates  262 

Claypoole  v.  King  187 

Cleary  v.  Sohier  116,  117 


Clements  v.  London,  etc.,  R.  Co.     69 
Cleveland  v.  Tufts  235 

v.  Wolff  152 

Cleveland  Cliffs  Iron  Co.  v.  East 

Itasca,  etc.,  Co.  18 

Clews  v.   N.   Y.   Nat.   Banking 

Assn.  80,  92 

Clifton  v.  Clifton  185 

v.  Cockburn  35 

Clinton  v.  Strong  219 

Close  v.  Phipps  216,  217 

Clothier  v.  Sigle  203 

Clover  v.  Gottlieb  265,  268 

Cobb  v.  Charter  216 

v.  Hall  98 

0.  Haynes  254 

Coburn  v.  Neal  35 

v.  Raymond  70 

Cocheco  Aqueduct  v.  Boston,  etc., 

R.  Co.  104 

Cochran  v.  Atchison  80 

Cocke  v.  Porter's  Extra.  231 

Cockran  v.  Tatum  262 

Coe  v.  Smith  122,  125,  130 

Cofer  v.  Riseling  152 

Cohn  v.  Heimbauch  153 

Cole  v.  Clark  52 

v.  Pennoyer  69 

Coleman  v.  United  States  48 

Collamer  v.  Bay  152 

Collar  v.  Patterson  51 

Collen  v.  Wright  77 

Collier  v.  Coates  98,  103 

Collins  v.  Thayer          93,  98,  106,  108 
v.  Westbury  216 

Collyer  ».  Collyer  48 

Colonial  Ins.  Co.  v.  Adelaid  Ma- 
rine Ins.  Co.  176 
Columbia  Bank,  etc.,  Co.  r>.  Hal- 

deman  143 

Colwell  v.  Peden  216 

Comes  v.  Lamson  98 

Commercial  Bank  v.  Auze  222 

Commercial,  etc.,  Bank  v.  First 

Nat.  Bank  80,  85,  92 

Commissioners  v.  Anderson  287 

v.  Armstrong  243 

Commissioners    of    Wabaunsee 

County  v.  Walker  238 

Commonwealth  v.  Field  40 

v.  Lancaster  County  Ins.  Co.        41 

v.  Slifer  287 

v.  Stebbins  36 

Concord  Coal  Co.  c.  Ferrin  58 

Congdon  v.  Perry  98 


XXIX 


TABLE   OF   CASES 


[References  are  to  Sections] 


Conkling  v.  City  of  Springfield  244 

v.  Underbill  224 
Conklyn  v.  Shenandoah  Milling 

Co.  128 

Conley  v.  City  of  Buffalo  238 

Connolly  v.  Sullivan  265 

Conover  v.  Hill  254 

».  Scott  236 

Conrow  v.  Little  266 
Consolidated   Fruit   Jar   Co.   ». 

Wisner  17 
Constantinides  v.  Walsh  205 
Continental     Caoutchouc     and 
Gutta  Percha  Company  v. 
Kleinwort,  Sons,  and  Com- 
pany 29 
Continental  Life  Ins.  Co.  v.  Hau- 

ser  262, 265 

Continental  Nat.  Bank  TJ.  Metro- 
politan Nat.  Bank  31,  92 

v.  Tradesmen's  Bank  25 

Contra  Costa  Water  Co.  v.  Breed  161 

Converse  v.  Sickles  229 

Cook  v.  Bates  48 
v.  Doggett                                 95,  102 

v.  Gray  265 

v.  McCabe  116 
Cook  and  Son  v.  City  of  Cameron  161 

Cook  County  v.  Fairbank  219 
Cook  &  Woldson  v.  Gallatin  R. 

Co.  262 

Cooke  v.  United  States  83 

Cooley  v.  Lobdell  101 

Coolidge  v.  Bingham  23 

Cooper  v.  Brown  208 

v.  Cooper  184,  282 

v.  Helsabeck  277 

v.  Phibbs  42 

v.  Shepherd  297 

Coppell  v.  Hall  143 

Corey  v.  Gale  229 

Cork,  etc.,  R.  Co.,  In  re  158 

Corn  Exchange  Bank  v.  Nassau 

Bank  25,  80 

Cornwall  v.  Heuson  263 

Corrunes,  The  Bello  206 

Corsicana  v.  Tobin  258 

Cory  v.  Freeholders  of  Somerset  281 

Cosgriff  D.  Foss  208 

Costa  v.  Yochim  258 

Cotnam  v.  Wisdom  201 

Coughlin  v.  Knowlea  98 
Couturier  v.  Hastie                        59,  60 

Coventry  v.  Barton  258 

Cowell  v:  Edwards  254 


Cowley  v.  Fabien 
Cox  v.  Prentice 

v.  Welcher 
Cozad  .'•.  Elam 
C.  P.  Minch,  The 


216 
27 

244 
95 

206 


Crabtree  v.  Old  Dominion,  etc., 

Assn.  226 

v.  Wells  98 

Craft  v.  McConoughy  149 

Craig  v.  Sibbett  91 

Craig  &  Angle  v.  Ankeney  254 

Craighead  v.  Wells  69 

Crane  v.  Goodwin  226 

v.  Murray  273,  277 

v.  Powell  93 

Cranmer  v.  Gernon  121 

Cranson  v.  Goss  153 

Crapson  v.  Wallace  Bros.  164 

Crauford's    Admr.     v.     Smith's 

Extr.  33,  34 

Crawford  v.  Jones  97 

v.  Russell  151 

v.  Scovell  70 

Craythorne  v.  Swinburne  254 

Cribbs  v.  Sowle  214 

Crocker-Woolworth  Nat.  Bank 

v.  Nevada  Bank  25,  80 

Cromwell  v.  Norton  95 

Crosby  v.  Bennett  222 

Crossley  v.  Dixon  62 

Crow  v.  Boyd's  Admrs.  280 

Crown  Cycle  Co.  v.  Brown  278 
Culberson    v.    Alabama    Const. 

Co.  285,  292 

Culbreath  v.  Culbreath  35,  36,  39,  185 

Culmer  v.  Wilson  258 

Culver  v.  Osborne  224 

Cummings  v.  Ellis  207 

v.  Knight  226 

Cunningham  v.  Boston  242 

v.  Jones  175 

v.  Monroe  242 

v.  Reardon  205 

Currier  v.  Studley  294 

Curtis  v.  Leavitt  140 

v.  Pocahontas  Co.  246 

Custin  v.  City  of  Viroqua  242 

Cutter  v.  Powell                113,  122,  124 

v.  Waddingham  284 

C.  &  J.  Michel  Brewing  Co.  v. 

State  215,  242 

D 

Dainmouth  v.  Bennett  135 

Dakin  v.  Oxley  120 


XXX 


TABLE   OF   CASES 


[References  are  to  Sections] 


Dakota,  etc.,  Co.  v.  Price  262 

Dale  v.  City  of  N.  Y.  238 

Dambmann  v.  Schulting  18 
Dame  v.  Woods                          116,  125 

Dana  v.  Colby  248 

Dance's  Admr.  v.  Magruder  51 

Danforth  v.  Dewey  262 
v.  Freeman                              175,  178 

Daniel  v.  Toney  73 

Daniell  v.  Sinclair  38 

Daniels  v.  Smith  298 

Dantzeiser  v.  Cook  262 
Darknell  v.  Cceur  D'Alene,  etc., 

Trans.  Co.  104 

Darst  v.  Brockway  62 

Dartmouth     College,     Trustees 

of,    v.    International   Paper 

Company  190 

Dash  v.  Inabinet  51 

Dashaway  Assn.  v.  Rogers  281 

Dauler  v.  Hartley  152 

Davidson  v.  Ernest  97 

v.  Westchester  Gas  Light  Co.  49 

Davis  v.  Badders                        175,  178 

v.  Barada-Ghio  Real  Estate  Co.  177 

v.  Barrington  172 

v.  Converse                             225,  226 

v.  Gelhaus  256 

v.  Gott  231 

•o.  Maxwell  174 

v.  Newman  185 

v.  Old  Colony  R.  Co.  160 

Davison  v.  Davison  48 

v.  Von  Lingen  59 

Dawkins  v.  Sappington  46 

Dawson  v.  Linton  248 

Day  v.  Buggy  Co.  160 

v.  Conn.  Gen.  Life  Ins.  Co.  265 

v.  New  York,  etc.,  R.  Co.,  22 

Hun.                                     34,  108 

51  N.  Y.                  23,  95,  96,  106 

c.  Wilson  100 

Dear  v.  Varnum  244 

Deaton  v.  Lawson  144 

De  Cesare  v.  Flauraud  50 

Dech's  Appeal  208 

Decker  v.  Pope  253 

v.  School  Dist.                        175,  178 

Dedham  Nat.  Bank  v.  Everett 

Nat.  Bank  87 

Deer-Isle  v.  Eaton  46 

Deering  v.  Earl  of  Winchelsea  254 

De  Graff  v.  County  of  Ramsey  244 

Deisch  v.  Wooten-Agee  Co.  27 

De  la  Cuesta  v.  Ins.  Co.  216 


Delius  v.  Cawthora  73 

Dellet  v.  Whitner  187 

De  Medina  v.  Grove  229 

De  Montague  v.  Bacharach  265 

Dennett  v.  Nevers  234 

Dent  v.  Ferguson  135 

Denver  v.  Evans  239 
De  Pauw  Plate  Glass  Co.  v.  City 

of  Alexandria  24 
Derby  v.  Johnson                       262,  268 

Dermot  i>.  Jones  23  How.  175 

2  Wall.  262 

Desert  Nat.  Bank  v,  Nuckolls  229 

Desgain  v.  Wessner  152 

De  Silvale  v.  Kendall  129 

Despatch  Line  v.  Bellamy  Co.  73 

Detroit  v.  Chaffee  258 

v.  Martin  239 

Detroit  Savings  Bank  v.  Detroit  237 

Deutsche  Bank  v.  Beriro  and  Co.  25 
Devine  v.  Edwards                      15,  179 

Devore  v.  Devore  95 

Dew  v.  Parsons  219 

Dewees  v.  Miller  152 

Dewey  v.  Toledo,  etc.,  R.  Co.  160 

v.  Union  School  District  122 
De  Wolff  v.  Howe  52 
Dickey  County  v.  Hicks  24 
Dickinson  v.  Hall  62 
Diefenback  v.  Stark  174 
Dietz's  Assignee  v.  Suttcliffe  278 
Dill  v.  Wareham  34,  150,  161 
Dingley  v.  Oler  263 
Disbrow  v.  Durand  51 
District  of  Columbia  v.  Chap- 
man 238 

v.  Glass  238 

Dix  v.  Marcy                         95,  96,  106 

Dixon  v.  Ahern  284 
D.   M.  Smith's  Comm.  v.  For- 

sythe  202 

Doane  v.  Badger  208 

Dobbins  v.  Higgins  268 

Dobbs  v.  Atlas  Elevator  Co.  97 

Dobson  v.  Winner  15 
Dodge  v.  Lansing,  etc.,  Traction 

Co.  48 

Dodson  v.  Harris  153 

Doe  v.  Bell  97 

v.  Cockron  97 

Doe  d.  Scott  v.  Alexander  187 

Doherty  v.  Dolan  262 

Dolan  v.  Mayor  of  N.Y.  287 

Doll  v.  Hollenbeck  224 

Donnell  v.  Cooke  185 


XXXI 


TABLE    OF   CASES 


[References  are  to  Sections] 


Donohue  ».  Chicago  Bank  Note  Co.  97 

Donovan  c.   Harriman  93 

v.  Purtell  281 

Dooley  v.  Jackson  152 

Doolittle  v.  McCullough  268,  269 

Dorsey  v.  Jackman  63 

Dougherty  v.  Chapman  293 

Doughten  v.  Camden  Assn.  265 

Douglas  c.  City  of  Lowell  175 

Douglas  County  c.  Keller  15 

p.  Sommer  40 

Douglass  v.  Kansas  City  238 
Dow  v.  First  Parish  in  Sudbury      238 

Dowdle  v.  Camp  98,  101 

Dowling  ».  McKenney  104 

Downey  v.  Riggs  177 

Downs  v.  Finnegan  273,  284 

Drake  o.  Goree  263 

Drennen  ».  Walker  208 

Drury  v.  Hooke  151 

Dryer  v.  Lewis  122 

Du  Bose  v.  Marx  299 

Due  d'Aumale,  The  206 
Duff  &  Repp  Furniture  Co.  ». 

Read  235 

Duluth  v.  McDonnell  179 

Dunbar  v.  City  of  Boston  243 

v.  Williams  195 

Duncan  v.  Baird  98 

v.  Baker  174,  178 

v.  Kirkpatrick  232 

v.  Ware's  Extra.  233,  236 
Duncan  &  Johnson  v.  Stokes          298 

Dung  v.  Parker  66,  93 

Dunham  v.  Griswold  214 

Dunlap  v.  Allen  46 

Dunn  v.  Moore  224 

».  Yakish  128 
Dunnell  Mfg.  Co.  ».  Newell  238,  244 

Dupuy  v.  Roebuck  232,  236 

Durham  r>.  Wick  95 
Durrant  v.  Ecclesiastical  Com- 

mrs.  25 

Dutch  v.  Warren  261 

D'Utricht  v.  Melchor  60 

Dutton  v.  Solomonson  262 

Duval  v.  Laclede  County  204,  205 

v.  Wellman  141,  151 

Du  Vail  v.  Norris  216 

Dwight  v.  Cutler  97 

Dyer  v.  Jones  174 

E 

Eagle  v.  Smith  46 

Eakright  ».  Torrent  268 


Earle  v.  Bickford 

v.  Coburn 

v.  Reed 
Earp  v.  Tyler 
East  v.  Ferguson 


32,  34,  63 
198 
202 
174 
185 


East  Anglian  R.  Co.  v.  Eastern 

Counties  R.  Co.  157 

East-Haddam  Bank  ».  Scovil  15 

Easterly  c.  Barber  254 

Eastern  Expanded  Metal  Co.  ». 

Webb  Granite  &  Const.  Co.     144 
Eaton  v.  Eaton  70 

v.  Glad  well  175,  17S 

v.  Langley  190 

Eaton  &  Prince  Co.  v.  Mississ- 
ippi, etc.,  Trust  Co.  256 
Ebelmesser  v.  Ebelmesser         187,  189 
Eckman  ».  Township  of  Brady       204 
Edgell  0.  McLaughlin  152 
Edgerly  v.  Hale  140 
Edinburg,  Town  of,  v.  Hackney       35 
Edison  Co.,  In  re                               238 
Edmunds  v.  Wallingford  249,  250,  251 
Edson  v.  Hammond                           201 
Edwards  v.  City  of  Goldsboro  135,  146 
v.  Randle                                          135 
v.  Trinity,  etc.,  R.  Co.  60 
Effinger  v.  Hall                                    187 
Ege  v.  Kille                                          187 
v.  Koontz                                           35 
Eggen  v.  Huston                                 224 
Ehernsperger  v.  Anderson                 263 
Eiseman  v.  Gallagher                         226 
Eldred  v.  Malloy                                 152 
Elgin  v.  Joslyn                                    277 
Ellett  v.  Wade                                     187 
Elliot  c.  Porter                           295,  299 
Elliott  v.  Caldwell                             175 
v.  Hayden                                        289 
v.  Swartwout                               27,  35 
Ellis  v.  Board  of  Auditors                   40 
v.  Midland  R.  Co.                          116 
v.  Ohio  Life  Ins.  &  Trust  Co. 

83,  90,  92 

Elston  ».  Chicago  35,  230 

Elton,  The  20G 

Elwell  n.  Martin  277,  291 

Ely  v.  Norton  33 

Emblem,  The  206 

Emerson  v.  Detroit,  etc.,  Spring 

Co.  278 

Emery  v.  Dunbar  129 

0.  Fowler  296 

v.  Lowell  242 

t>.  Smith  104 


XXX11 


TABLE    OF   CASES 


tReferences  are  to  Sections] 


Emmerling  ».  First  Nat.  Bank 

156,  159 

Emmons  r>.  Scudder  215 

England  v.  Marsden  249 

Englebert  v.  Troxell  69 

Englishman  and  The  Australia, 

The  256,  259 

Ennis,  In  re  Sir  J.  J.  254 

Eppstein  v.  Kuhn  128 

Erben  v.  Lorillard  104,  105 

Erkens  v.  Nicolin  35,  36 

Ernst  v.  Schmidt  102 

Erskine  v.  Van  Arsdale  244,  245 

Erwin  v.  City  of  Jersey  City          287 

v.  Erwin  65 

Espy  v.  Bank  of  Cincinnati  80 

Estes  v.  Browning  177 

Eubank  v.  Rail's  Extr.  234 

Evans  v.  Gale  215 

v.  Garlock  72,  75 

v.  Henry  46 

v.  Trenton  148 

v.  Winona  Lumber  Co.  97 

Everet  v.  Williams  149 

Everroad  v.  Schwartzkopf  175 

Evershed   v.  London,  etc.,  R.  Co. 

220 

Ewing  v.  Peck  231,  232 

0.  Thompson  105 

Exall  v.  Partridge  248 


Fain  p.  Nelms  189 

Fairbanks  v.  Richardson  Drug 

Co.  116 

Fairford  Lumber  Co.  v.  Tombig- 

bee,  etc.,  R.  Co.  221 

Fairplay  School  Tp.  v.  O'Neal  64 

Fakes  c.  Price  256 

Falcke  v.  Scottish  Imperial  Ins. 

Co.  207 

Falkenburg  v.  Allen  152 

Falls  v.  City  of  Cairo  239 

Falvey  v.  Board  of  County 

Commrs.  238 

Fanson  e.  Linsley  272,  273,  280 

Fargusson  v.  Winslow  216 

Farmer  v.  Arundel  22 

Farmers',  etc.,  Bank  v.  Bank  of 

Rutherford  80,  83 

v.  Galbraith  180 

Farnam  o.  Davis  102 

Farnum  v.  Kennebec  Water  Dist.  269 

Farrand,    etc.,  Co.    v.   Board   of 

Church  Extension  72 


Farrow  v.  Mayea  230" 

Farwell  v.  Becker  256 

v.  Hanchett  278 

Fay  v.  Burditt  70 

v.  Fay  205 

v.  Fitzpatrick          .  267 

v.  Lovejoy  226 

v.  Oliver  265 

v.  Slaughter  75,  76 

Federal  Ins.  Co.  v.  Robinson          229 

Fee  v.  Cowdry  187 

Feeney  v.  Bardsley  175 

v.  Howard  66,  93 

Fegan  t>.  Great  Northern  R.  Co.       25 

Fenton  v.  Clark  122 

Fenwick  Shipping  Co.  v.  Clarke 

Bros.  216 

Ferguson  v.  Carrington  278 

Ferns  v.  Carr  130 

Ferrers  v.  Arden  296 

Festing  ».  Hunt  263 

Fetrow  v.  Wiseman  69 

Fidelity  Trust,  etc.,  Co.  v.  Louis- 
ville Banking  Co.  234 
Field  v.  Yeaman  231 
Finch  v.  Finch                                     203 
v.  Parker                                          267 
Findley  v.  Wilson  102 
Finklestone  v.  Lanzke                       229 
First  Baptist  Church  v.  Caughey 

72,  75 

First  Nat.  Bank  v.  Alexander  160 

v.  Avery  Planter  Co.  256 

v.  Bank  of  Wyndmere  80,  88 

v.  Behon  15 

v.  Burkham  18,  91 

v.  City  Nat.  Bank  80 

v.  City  of  New  Castle  161 

v.  Farmers'  &  Merchants'  Bank     80 
v.  Henry  277 

v.  Leppel  148 

v.  Marshalltown  State  Bank         80 
v.  Millen  233 

v.  Oberne  72,  75 

v.  Price  236 

v.  Ricker  80,  83,  92 

t>.  Sargeant  217 

?).  Taylor  15 

v.  Union  School  Township  75 

•o.  Watkins  238 

v.  Wood  226 

First  Nat.  Bank  of  Americus  v. 

The  Mayor  238,  243 

First  Nat.  Bank  of  Danvers  v. 

First  Nat.  Bank  of  Salem     80,  92 


XXX111 


TABLE   OP   CASES 


[References  are  to  Sections] 


First  Nat.  Bank  of  Denver  v. 

Devenish  182 
First  Nat.   Bank  of  Omaha  «. 

Mastin  Bank  179 

Fischer  v.  Gaither  254 

Fish  v.  Correll  175 

Fitch  v.  Snedaker  46 

Fitzgerald  v.  Allen  268 

Fitzsimmons  v.  City  of  Brooklyn  287 

Fivaz  v.  Nicholls  143 

Five  Steel  Barges  206 

Flack  v.  Nat.  Bank  of  Commerce  215 

Flagg  ».  Baldwin  152 

v.  Gilpin  152 

Fleetwood  v.  City  of  New  York  239 

Fleming  v.  City  of  Anderson  296 

Fletcher  v.  City  of  Alpena  243 

Flinn  v.  Barber  262 

v.  Mechanics'  Bldg.  Assn.  226 
Florence    Cotton,  etc.,  Co.    v. 

Louisville  Banking  Co.     235,  236 

Florida,  etc.,  R.  Co.  v.  Bisbee  234 

Flowers  v.  Poorman                     95,  103 

Floyd  v.  Browne  299 

Floyd  County  v.  Allen  161 

v.  Owego  Bridge  Co.  161 

Flynn  v.  Hurd  35 

Foeller  v.  Heintz  175 

Fogg  v.  Holbrook  205 

Foley  v.  Bushway  205 

Ford  v.  Harrington  141 

•o.  Holden                                 219,  245 

T>.  Holton  187 

v.  Knapp  208 

v.  People's  Bank  92 

v.  Stroud                                  102,  107 

Forman  &   Co.,   Proprietary  v. 

The  Ship  "Liddesdale"  116,  164 

Forsyth  v.  Ganson  209 

v.  Hastings  174 

».  Wells  190 

Forsythe    v.    Los    Angeles    R.    Co. 

256 
Fort  Scott  v.  Kansas  City,  etc., 

R.  Co.  256 

Foshay  v.  Ferguson  216 

Foss  v.  Lowell,  etc.,  Bank  56 

v.  Whitehouse                         214,  243 

Fossett  ».  Wilson  214 

Foster  v.  Adams  262 

v.  Kirby  22 

v.  Stewart  285 

v.  Wilcox  68 

».  Wooten  153 

Fountain  v.  Sacramento  161 


Fout  v.  Giraldin  217 

Fowler  v.  Armour  262 

v.  Equitable  Trust  Co.  226 

Fox  v.  Dawson  184,  282 

v.  Northern  Liberties  295 

Fox's  Heirs  i>.  Longly  102,  107 

Fraker  v.  Little  15 

Frambers  v.  Risk  13 

France's  Estate  199,  205 

Frank  v.  Chemical  Nat.  Bank        80 

Franklin  v.  Long  60 

v.  M:itn;i,  etc.,  Min.  Co.  95 

Franklin  Bank  v.  Raymond  18,  22 

Franklin  Co.  v.  Savings  Bank  156 

Franklin,  Negro,  v.  Waters  184 

Fraser  v.  Pendlebury  217 

Frazer  v.  Howe  95,  103 

Freeman  v.  Coit  205 

r>.  Foss  98 

v.  Freeman  51 

v.  Jeffries  32 

Freer  v.  Denton  262 

Freeth  v.  Burr  263 

French  v.  Benton  204 

v.  Matteson  152 

Fretz  v.  Murry  226 

Frey  v.  Stangl  95,  108 

Fricke  v.  Safe  Deposit,  etc.,  Co.     187 

Friermuth  v.  Friermuth  51 

Frye  v.  Lockwood  245 

Fuerst  v.  Musical,  etc.,  Union         218 

Fulham  v.  Down  238 

Fuller  v.  Duren  277 

v.  Reed  104,  105 

».  Rice  104 

v.  Shattuck  229 

Fuller-Warren  Co.  v.  Shurts  175 

Fuqua  v.  Massie  174 

Furlong  v.  Pearce  222 


Gaffner  v.  Johnson  258 

Gage  v.  Allen  35 

Gaillard  v.  Le  Seigneur  224 

Gale  v.  Nixon  265 
Gallego's  Extra.  0.  Attorney 

General  185 

Gait  v.  Calland  73 

Galusha  v.  Sherman  212 
Galveston  County  v.  Galveston 

Gas  Co.  244 

Galveston,  etc.,  R.  Co.  v.  Nass  256 

Galveston  Gas  Co.  t>.  Galveston  239 
Galvin  v.  Prentice  98,  104 


XXXIV 


TABLE   OF   CASES 


[References  are  to  Sections! 


Galway  v.  Shields  100 

Gammon  v.  Butler  98 

Gangwere's  Estate,  In  re  70 

Ganong  &  Chenoweth  v.  Brown     116 
Garland  v.  Salem  Bank  27,  179 

Garr  v.  Cranney  64 

v.  Martin  233 

Gas  Float  Whitton,  The  201 

Gaskins  v.  Davis  190 

Gates  v.  Rifle  Boom  Co.  190 

Gaty  v.  Sack  267 

Gay  v.  Mooney  95 

v.  Smith  235 

Geiger  v.  Cook  62 

George  v.  Tallman  179 

Georgia,  etc.,  R.  Co.  v.  Jossey        258 
Georgia  R.,  etc.,  Co.  v.  Smith  34 

Germain  v.   Union  School   Dis- 
trict 175,  178 
German  Security  Bank    v.  Co- 
lumbia, etc.,  Trust  Co.  25 
Germania  Bank  v.  Boutell     87,  88,  92 
Gibboney  v.  R.  W.  Wayne  &  Co. 

176,  178 
Gibson  v.  Pelkie  60 

v.  Soper  70 

v.  Sturge  120 

Gilbraith  v.  Stewart  Transp.  Co.    206 
Gilbreth  v.  Grewell  177 

Gilder  v.  Hearne  224 

Giles  v.  Edwards  262 

v.  McEwan  95,  104 

Gill  v.  City  of  Oakland  239 

v.  Volger  175 

Gillet  v.  Maynard  102 

Gillett  v.  Brewster  32 

Gilliam  v.  Brown  148,  149 

Gillig  ».  Grant  41 

Gillis  v.  Cobe  178 

Gilmore  v.  Aiken  62 

v.  Wilbur  289,  290 

v.  Woodcock  152 

Gist  v.  Smith  222 

Glass  v.  Hampton  107 

Gleason  ».  Warner  205 

Glocke  v.  Glocke  262 

Gloucester  Bank  v.  Salem  Bank 

80,  83,  92 
Glover  ».  Foote  232 

v.  Richardson  &  Elmer  Co.  258 

Goddard  v.  Merchants'  Bank      85,  89 

v.  Putnam  179 

v.  Seymour  243 

Goetz  v.  Bank  of  Kansas  City       91 
Goff  v.  Craven  295 


Goldie  &  McCullough  v.  Harper  128 
Goldman  v.  Hadley  60 
v.  Rosenberg  128 
Golsen  v.  Brand  254 
v.  Golsen  205 
Gompertz  v.  Bartlett  60 
Good  v.  Elliot  152 
Goodman  v.  Pocock  266 
Goodnow  11.  Stryker  33 
Goodridge  v.  Lord  248 
Goodspeed  v.  Fuller  180 
Gordon,  Rankin  &  Co.  t>.  Tweedy  187 
Gordon's  Extr.  v.  Mayor  of  Bal- 
timore 229 
Gorrell  v.  Taylor  51 
Gorringe  v.  Reed                        141,  214 
Gosbell  v.  Archer  262 
Gould  v.  Baker  277 
v.  Farmers'  Loan,  etc.,  Co.  216 
v.  McFall                                 232,  236 
».  Murch  128 
Gourley  v.  Allen  204 
Gove  v.  Island  City,  etc.,  Co.  175,  178 
Gower  v.  Emory  258 
Grace  v.  McElroy  152 
Graeber  v.  Sides  253 
Graeme  v.  Cullen  187 
Graham  v.  Dunigan  248 
v.  Graham                                 95,  106 
v.  Halloway  266 
v.  Hatch  Storage  Battery  Co.  266 
v.  Stanton  282 
Grand  Forks  v.  Paulsness  258 
Grand  Lodge  v.  Waddill  160 
Grand  Trunk  R.  Co.  v.  Latham  258 
Grandin  v.  Admr.  of  Reading  48 
Granger  v.  Hathaway  27 
Grant  v.  Ryan  135 
Graves  v.  White                        263,  266 
Gray  t>.  Boston  Gas  Light  Co.  258 
».  Hill  102 
v.  Roberts  140 
Great  Berlin  Steamboat  Co.,  In 

re  144 
Great  Northern  R.  Co.  v.  Swaf- 

field                                     197,  207 
Great  North-West,  etc.,  R.  Co.  v. 

Charlebois  157 

Great  Western  R.  Co.  v.  Button  220 

Green  v.  Brengle  234 

v.  Drummond  101 

v.  Duckett  216 

v.  Green  69 

v.  Linton  122 

v.  R.  Co.  100 


XXXV 


TABLE    OF   CASES 


[References  are  to  Sections] 


Green  v.  Sevin  267 

v.  Stone  236 

Greenabaum  v.  Elliott  229 

Greenwald  v.  Ford  92 

Greer  v.  McCarter  248 

v.  Newland  279 

v.  Vaughan  189 

Gregg  v.  Page  Belting  Co.  256 

v.  Patterson  187 

v.  Wilmington  258 

Gregory  v.  Clabrough's  Extra.  39 

v.  Hooker's  Admr.  205 

Gribben  v.  Maxwell  70 

Gridley  t>.  City  of  Blooraington  258 

Grier  v.  Huston  28 

Griffin  v.  Sansom  49 

Griffith  v.  Johnson's  Admr.       27,  179 

Griggs  v.  Austin  129 

Grimes  v.  Goud  177 

Grim's  Estate  34 

Griswold  v.  Bragg  187 

Gross  v.  Cadwell  46 

v.  Coffey  222 

Groton  Bridge,  etc.,  Co.  o.  Board 

of  Sup'rs.  161 

Grow  v.  Albee  225 

Grymes  v.  Sanders  15 
Guaranty  Trust  Co.  v.  City  of 

New  York  238 

Guenther  v.  Birkicht's  Admr.  51 

Guetzkow  Bros.  Co.  v.  Breese  218 
Guild  o.  Baldridge 

13,  14,  15,  16,  25,  179 
Gulf,  etc.,  R.  Co.  v.  Galveston, 

etc.,  R.  Co.  256 

Gullich  v.  Alford  265 

Gupton  o.  Gupton  101 

Guthman  r.  Parker  152 

Guy  v.  Mooney  103 

Gwinnup  v.  Shies  175 


Hackley  v.  Headley  218 

Hadden  t>.  Innes  222 

Haebler  v.  Myers  232 
Haedicke  v.  Friern  Barnet  Urban 

Council  215 

Hagar  v.  Springer  229 

Hague  v.  Philadelphia  161 

Hairston  v.  Jaudon  98 

Hale  v.  Passmore  231 

v.  Sherwood  152 

Hall  v.  Brummal  189 

c.  Conder  62 


Hall  r.  Graham 

v.  Hunter 

v.  Piddock 
Hallock  i).  Ins.  Co. 


33,34 

262 

208 

61 


Halsey  v.  Waukesha  Springs  San- 
itarium 116 
Ham  v.  Goodrich  105,  106 
Hambly  v.  Trott  273,  280 
Hamilton  D.  Park  62 
Hamilton  County  ».  Myers  204 
Hamlet  v.  Richardson  228 
Hampden  v.  Walsh  152 
Hanauer  v.  Woodruff  143 
Handley  v.  Helfin  254 
Handlin  v.  Morgan  County  205 
Hanley  v.  Walker  116 
Hanna  v.  Mills  262 
Hansell  v.  Erickson  174 
Hapgood  v.  Houghton  205 
Harbaugh  v.  Tanner  224 
Harber  Bros.  Co.  v.  Moffat  Cycle 

Co.  263 

Harden  v.  Lang  266 

Hardy   v.    Chesapeake   Bank    80,  83 

v.  Jones  148 

Harkness  v.  Mclntire  106 

Harley  &  Willis  v.  Stanley  128 

D.  Putnam  62 

Harman  v.  Loscalzo  277 

Harmon  v.  Harmon  214,  215 

Harmony  v.  Bingham  216,  220 

Harper  v.  Middle  State  Co.  222 

Harris  v.  Bressler  226 

0.  Ferguson  254 

v.  Loyd  18,  19 

v.  Smith  51 

v.  White,  5  N.  J.  L.  185 

81  N.  Y.  152 

Harrison  v.  Luke  262 

Harse  v.  Pearl  Life  Assurance 

Co.  134,  137 
Hartford  Fire  Ins.  Co.  v.  Kirk- 

patrick  214 
Hartman  v.  Rogers  174 
Harvey  v.  Briggs  69 
v.  Merril  135 
v.  Town  of  Olney  238 
Haslack  v.  Mayers  166,  176 
Hastelow  v.  Jackson  152 
Hatcher  v.  Briggs  187 
Hathaway  o.   County  of  Dela- 
ware 15,  25 
v.  Hoge  177 
Hatter  v.  Greenlee  214 
Haven  v.  Foster  43 


XXXVI 


TABLE    OF   CASES 


[References  are  to  Sections] 


Haven  v.  Mehlgarten 
Hawkins  v.  Beal 

v.  Welch 

Hawley  v.  Moody 
Hay  v.  Walker 


208 
102 
225 

96,  103 
46,  47 


Hayes  v.  County  of  Los  Angeles     246 
v.  Gross  116,  118 

Haynes  v.  Rudd  141 

Haynes,  Spencer  &  Co.  v.  Second 

Baptist  Church  116,  118 

Hays  v.  Cassell  235 

v.  Stewart  219 

Hayward  v.  Leonard  175,  178 

Hazelrigg  v.  Donaldson  216 

Heard  v.  Drake  185 

Hearsey  v.  Pruyn  27 

Heath  v.  Albrook  40 

v.  Stevens  69 

Heath  &   Milligan  Mfg.  Co.  v. 

Nat.  Linseed  Oil  Co.  35 

Heather  Bell,  The  248 

Heaton  v.  Eldridge  66 

Heaton,  etc.,  Co.  v.  Eureka,  etc.,  Co.  62 
Heber  v.  Estate  of  Heber  277 

Hecht  v.  Skaggs  254 

Heckman  v.  Swartz  214 

Heddon  v.  Roberts  176 

Heilbut  v.  Nevill  279 

Heims  Brewing  Co.  v.  Flannery     160 
Heine  v.  Meyer  124 

Heiserman  ».  Burlington,  etc.,  R. 

Co.  220,  221 

Hemminger   v.    Western   Assur. 

Co.  262,  268 

Hemphill  v.  Moody  35 

Henderson  v.  Detroit  284 

v.  Folkstone  Waterworks  Co. 

35,  38 

».  Stiles  174 

c.  Welch  248 

Henderson   Bridge   Co.   v.    Mc- 

Grath  65 

Hendricks  v.  County  of   Chau- 

tauqua  204 

Hennel  v.  Board  of  Commrs.  238 

Hennessy  v.  Bacon  267 

Henry  Steers,  Jr.,  The  206 

Hensinger  v.  Dyer  214 

Hensler  v.  Jennings  152 

Hentig  v.  Staniforth  137 

Herdic  v.  Young  190 

Herman  v.  Jeuchner  143,  144 

Hermann  v.  Charlesworth  151 

Hermanos  v.  Duvigneaud  73 

Hernaman  v.  Bawden  121 


Herold  v.  Kahn  244 

Hertzler  v.  Geigley  148 

Hertzog  v.  Hertzog  4,  50 

v.  Hertzog's  Admr.  104,  105 

Herzog  v.  Heyman  62 

Hess  v.  Culver  141 

Hess  Co.  v.  Dawson      .  262 

Hewer  v.  Bartholomew  35 

Hewitt  v.  Anderson  46 

Hiatt  v.  Twomey  62 

Hickam  v.  Hickam  184 

Hicks  v.  Blakeman  189 

v.  Webb  187 
Hier  v.  Anheuser-Busch  Brewing 

Assn.  236 

Higby  ».  Whittaker  267 
Higgins  v.  Breen                        184,  282 

v.  City  of  San  Diego  161 

Highwayman's  Case  149 

Hilborn  v.  Bucknam  215 
Hildebrand    v.    The    American 

Fine  Art  Co.  174,  178 

v.  Kinney  205 

Hill  v.  Dist.  of  Columbia  238 

v.  Hill  51 

v.  Perrott  278 

Hillebrands  ».  Nibbelink  105 

Hills  v.  Street  219 

Hillyard  v.  Banchor  177 

v.  Crabtree  178 

Hindmarch  v.  Hoffman  279 

Hinds  v.  Township  of  Belvidere  243 

Hines  v.  Board  of  Commrs.  215 

Hinsdell  v.  White  141 

Hintze  o.  Taylor  222 
Hipp  v.  Crenshaw                      217,  232 

Hirsch  v.  Leatherbee  Lbr.  Co.  273 

Hitchcock  v.  Galveston  161 
Hitchin  [or  Kitchen]  v.  Campbell 

273,  298 

Hoadley  v.  Dumois  248 

Hoagland  v.  Moore  262 

Hobbs  ».  Boatright  141 

Hobson  v.  Pattenden  131 

Hochster  v.  De  la  Tour  263 

Hodgson  r>.  Baldwin  254 

Hodson  v.  Heuland  101 
Hoffman  v.  Bank  of  Milwaukee 

80,  91 

Hofstetter  v.  Gash  174 

Hogg  v.  Langstreth  248 

v.  Laster  51 

Hoggan  v.  Gaboon  258 

Hoke  v.  City  of  Atlanta  239 
Holden  Taft  &  Co.  v.  Lineville  Pike   69 


XXXV11 


TABLE   OF   CASES 


[References  are  to  Sections] 


Holder  Borden,  The 
Holland  v.  Russell 
Hollingsworth  v.  Stone 
Hollis  v.  Chapman 
Holman  v.  Updike 
Holmes  v.  Blogg 

v.  McGill 
Holt  v.  Green 

v.  Ross 

v.  Thomas 
Holthouse  0.  Rynd 
Homer  ».  Fish 
Hood  0.  League 
Hooker  v.  De  Palos 
•   v.  Gurnett 
Hooper  ».  Robinson 
Hope,  The 
Hopkins  v.  Hereey 
Hopper  v.  Burness 


206 

27 

230 

116 

266 

69 

62 

143 

80 

13,  18,  215 

95,  102 

229 

50 

135,  146 
219 
27 
206 
295 
120 


Horbach's  Admrs.  v.  Elder  256 

Hornefius  v.  Wilkinson  277 

Hoskins  v.  Mitcheson  98 

Hosley  v.  Black  262 

Hosmer  v.  Barret  232 

Hotopp  v.  Morrison  Lodge  208 

Houck's  Extra,  v.  Houck  51 

Houghtaling  v.  Ball  93 

Houghton  v.  Town  of  Danville        204 
House  v.  Kendall  262 

Houser  v.  Sain  51 

Houston  &  Texas  Central  Rail- 
way Company  v.  Hughes 

15,  29,  179 

Hovey  v.  Hobson  70 

Howard  v.  Augusta  238,  244 

v.  Mississippi  Bank  80,  85,  92 

Howell  v.  Medler  175 

Howes  v.  Barker  180 

Rowland  v.  Lounds  46 

Hubbard  v.  Belden  122,  125 

v.  Brainard  238 

v.  City  of  Hickman  22 

v.  Martin  35 

Hudgens  v.  Kennedy  287 

Hudson  v.  Hudson,  87  Ga.         48,  127 

90  Ga.  51 

v.  Whitmire  206 

Huffman  v.  Hughlett  299,  300 

Huganir  v.  Cotter  292 

Hughes  v.  Cannon  174 

v.  Dundee  Mortgage,  etc.,  Co.  46,  50 

v.  Ins.  Co.  61 

Hulkes,  In  re  38 

Hull  v.  Bank  of  South  Carolina      182 

v.  Thorns  95 


Humbird  v.  Davis  281 
Hunt  v.  Amidon                         251,  253 
v.  Bates  295 
v.  Lane  256 
v.  Osborne  5O 
».  Rousmanier  42 
v.  Silk  265 
Hunter  v.  Waldron  262 
Kurd  v.  Denny  262 
v.  Doty  148 
v.  Hall  60 
Hurley  v.  Lamoreaux  284 
Hurtin  v.  Ins.  Co.  120 
Huse  v.  Den  187 
Huston,  City  of,  v.  Feeser  242 
Hutchings  &  Co.  v.  Stilwell  152 
Huyett  Mfg.  Co.  v.  Chicago  Edi- 
son Co.  116 
Hyatt  v.  Ingalls  62 
Hyde  v.  Cookson  190 
v.  Leisenring  203 
Hylton  v.  Brown  187 
Hysell  v.  Sterling  Coal  Co.  116 


Illinois  Cent.  R.  Co.  v.  Ross  284 
Illinois  Glass  Co.  v.  Chicago 

Telephone  Co.  220,  221 

Illinois  Trust,  etc.,  Bank  v.  Felsenthal  22 
Imperial  Bank  v.  Bank  of  Hamil- 
ton 80,  92 
Independence,  The  206 
Independence  t>.  Missouri,  etc.,  R. 

Co.  258 

India,  The  206 

Indianapolis  v.  McAvoy  183 

v.  Patterson  33,  183 

v,  Vajen  246 

Inhabitants  of  Deer-Isle  v.  Eaton  46 
Inhabitants  of  Stow  v.  Sawyer  46 
Inman  v.  White  Lumber  Co.  179 

International  Paper  Co.  v.  Purdy     298 
Interstate  Hotel  Co.  v.   Wood- 
ward, etc.,  Co.  95 
Iron  City  Nat.  Bank  v.  Fort  Pitt 

Nat.  Bank  31,  92 

Iron  City  Tool-Works  v.  Long  248 
Irvine  v.  Angus  248 

Irving  v.  Richardson  179 

v.  Wilson  216 

Irwin's   Admr.    v.    Brown's   Extrs. 

290 

Isle  Royal  Mining  Co.  v.  Hertin  190 
Isom  v.  Johns  234 


XXXV111 


TABLE   OF   CASES 


[References  are  to  Sections] 


Jackson  v.  Loomia 
i).  McKnight 
v.  McLean 
v.  Newman 
v.  Town  of  Union 


187 
22 
149 
242 
243 


Jackson,  County  of,  v.  Hall     262,  265 

Jackson's  Admr.  v.  Jackson  51 

Jacobs  v.  Pollard  256 

Jacobson  v.  Le  Grange  64 
Jacques  v.  Methodist  Episcopal 

Church  68 

James,  Ex  parle  41 

James  v.  Burchell  263 

v.  Cavit  229 

v.  Hodsden  281 

v.  Kerr  222 

v.  Le  Roy  285 

James  River  Nat.  Bank  v.  Weber  15 

Janes  v.  Buzzard  280 

Janouch  v.  Pence  284 

Jaques  c.'Golightly  140 

v.  Withy  140 

Jarboe  v.  Severin  96 

J.  B.  Alfree  Mfg.  Co.  v.  Grape 

265,  266,  267 

Jefferson  County  v.  Hawkins  40 

Jefts  v.  York  27 

Jellison  v.  Jordan  95 

Jenkins  v.  Tucker  205 

Jenks  0.  Lima  Township  244 

Jennings  v.  Camp  175 

v.  Lyons  122 

Jenson  v.  Lee  262 

v.  Toltec  Ranch  Co.  156 
Jersey  City,   Mayor,   etc.,  of,  v. 

Riker  237 

Jessup  v.  Fairbanks,  Morse  &  Co.  128 

Jester  v.  Knotts  277 

J.  M.  Arthur  &  Co.  v.  Blackman  128 
Joannin  v.  Ogilvie             212,  216,  217 

John  Weber  &  Co.  v.  Hearn  56 
Johnson  v.   Boston  and   Maine 

Railroad  Company     19,  179,  209 

v.  Gate  281 

v.  Douglas  141 

v.  Fall  152 

v.  Fehsefeldt  175 

v.  Harvey                                253,  254 

v.  Hulings  143 

».  Ingram  187 

v.  McKenna  295 
v.  Northwestern     Mut.     Life 

Ins.  Co.  69 


Johnson  v.  Puget  Mill  Co.         98,  101 
v.  Royal  Mail  Steam  Packet 

Co.  248 

v.  Saum  14,  15,  32,  179 

v.  Seymour  281 

v.  Sims  121 

v.  Torpy  256 

v.  Willimantic  Linen  Co.  62 

Johnson-Brinkham  Co.  v.  Cen- 
tral Bank  277 
Johnson  Forge  Co.   v.    Leonard 

262,  263 
Johnston  v.   Commercial    Bank 

80,  85,  90 

v.  Glancy  101 

v.  Miller  236 

v.  Russell  152 

Johnstone  o.  Milling  263 

Jones  v.  Brown  278 

v.  Burnham  62 

v.  Fulwood  17 

v.  Hoar  273 

v.  Inness  281 

v.  Jones  187 

v.  Judd  124,  125 

v.  Miners'  &  Merchants'  Bank 

87,  88,  90 

v.  Randall  36 

v.  Ryde  60 

v.  School  District  33 

Jones  County  v.  Norton  46 

Jordan  v.  Fitz  174 

Joyce  v.  Adams  128 

Justh  v.  Nat.  Bank  279 


Kalmbach  v.  Foote  233 

Kampmann  v.  Rothwell  258 

Kane  v.  Morehouse  37 
Kanneberg  v.  Evangelical  Creed 

Congregation  160 
Kansas  City  v.  Wyandotte  Gas 

Co.  161 

Kansas,  etc.,  R.  Co.  v.  Commrs.  238 

Katz  v.  Bedford  175 

Kauffman  v.  Raeder  265 
Kaufman  Advertising  Agency 

v,  Snellenburgh  46 

Kearley  v.  Thompson  140,  144,  146 

Kearney  v.  Doyle  268 

Keath  v.  Patton  96 

Keazer  v.  Colebrook  Nat.  Bank  35 

Keegan  v.  Estate  of  Malone  51 

Keehn  v.  McGillicuddy  232,  239 


XXXI X 


TABLE   OF   CASES 


[References  are  to  Sections] 


Keel  v.  Larkin  253 

Keeler  c.  Heir  175 

Kein  v.  Tupper  176 

Keith  v.  Congregational  Parish     248 

v.  De  Bussigney  198 

v.  Hobbs  62 

Kelley  v.  Cosgrove  153 

Kclley  v.  Lindsay  72 

r.  Rhoads  238 

Kellogg  v.  Turpie  278 

Kelly  v.  Bliss  128 

r.  Davis  203 

v.  Solan  14,  15,  179 

Kelton,  The  Minnie  E.  206 

Kendall  v.  Davis  225 

Kennebunkport  v.  Smith  46 

Kennedy  v.  Embry  267 

Kenneth  v.  So.  Car.  R.  220 

Kent  v.  Bornstein  23 

Kentucky,  etc.,  Trust  Co.  v.  Lan- 

gan  37 

Kenyon  v.  Brightwell  205 

Kerr  v.  Cusenbary  46 

v.  Nicholas  187 

T.  Regester  40 

Kerrison  v.  Glyn,  Mills,  Currie 

&  Co.  27 

Kessler,  Estate  of  103,  108 

Ketchum  v.  Catlin  60 

v.  Evertson  177 

Kettry  v.  Thumma  103 

Keys  v.  Harwood  262 
Kicks  v.  State  Bank         262,  263,  265 

Kidder  v.  Sowles  273 

Kidney  t>.  Persons  277 

u.  The  Ocean  Prince  206 

Kiewert  v.  Rindskopf  142,  148 

Kilgore  v.  Rich  202 
Kilmer  v.  New  York,  etc.,  R.  Co. 

220 
Kilpatrick  v.  Germania  Life  Ins. 

Co.  217 

Kimball  v.  Bell  262 

King  v.  Brown  95,  105 

v.  Low  112,  116 

r.  Mason  284 

r.  Merriman  190 

r.  Thompson  101 

t>.  Welcome  98 

v.  Williams  2 

t>.  Woodruff  97 

Kingston  Bank  v.  Eltinge,  40 

N-  Y.  15,  25 

66  N.  Y.  24,  25 

Kinney  v.  Cook  184 


Kirby  v.  Harrison  267 
Kirklan  &  Hickson  v.  Brown's 

Admrs.  229 

Kirkman  v.  Phillips  294 

Kirksey  v.  Kirksey  65 

Kiser  r.  Holladay  60 
Kitchen  v.  Campbell  273,  298 
v.  Greenabaum  138,  141 

Klien  c.  Bayer  217 

t>.  Pederson  141 

Kneil  v.  Egleston  68 

Knibbs  ».  Hall  216 
Knickerbocker  Trust  Co.  v.  One- 

onta,  etc.,  R.  Co.  35 

Knight  v.  Fairfield  204 

Knowles  v.  Boston  246 

v.  Bovill  127 

Knowlman  v.  Bluett  95 
Knowlton  v.  Congress,  etc., 

Spring  Co.  144 
Knudson,  etc.,  Co.  v.  Chicago, 

etc.,  R.  Co.  220 

Koch  v.  Williams  100 

Koenig  v.  Peoples  Gas,  etc.,  Co.  212 
Kokomo  Strawboard  Co.  v.  In- 

man  262 
Koontz  v.  Central  Nat.  Bank  15,  25 
Kowalke  v.  Milwaukee  Elec.,  etc., 

Co.  17 

Krause  v.  Board  of  Trustees  116 

Krebs  Hop  Co.  v.  Livesley  263 

Kreiter  v.  Bomberger  180 

Krietz  v.  Behrensmeyer  287 

Kriger  v.  Leppel  98 

Kryn  v.  Kahn  278 

Kuhn  v.  Freeman  128 


Labbe  v.  Bernard 
Labowitz  v.  Frankfort 
Lacy  v.  Brown 

r.  Pixler 
Ladd  v.  Barton 


253 
119 
224 
69 
140 


La  Du-King  Mfg.  Co.  v.  La  Du     105 
Lady  Durham  121 

La  Farge  v.  Kneeland  27 

Lafayette,  etc.,  R.  Co.  v.  Pattison 

216,  220 
La  Fayette  &  Bro.  v.  Merchants' 

Bank  80 

La  Fontain  v.  Hayhurst  48 

Lake  v.  Perry  69 

Lakeman  v.  Pollard  122 

Lally  v.  Crookston  Lumber  Co.     104 


xl 


TABLE   OF   CASES 


[References  are  to  Sections] 


Lamb  v.  Rathburn  17 

Lamborn  v.  County  Commrs.  239 

Lamine  ».  Dorrell  273 
Land  Mortgage,  etc.,  Co.  v.  Gillam 

226 

Landa  v.  Obert  214 

*.  Shook  122 

Lane,  The  Charles  D.  121 

Lane  v.  Fenn  258 

v.  Pere  Marquette  Boom  Co.  179 

v.  Phillips  174 

v.  Shackford  98 

Langevin  v.  City  of  St.  Paul  18 

Langford  v.  Caldwell  262 

Langley  v.  Warner  234 

Lansdown  v.  Lansdown  36 

Lansdowne  v.  Lansdowne  35 

Lantry  v.  Parks  174 

Larkin  v.  Buck  174 

La  Salle,  County  of,  v.  Simmons  242 

Laterrade  v.  Kaiser  219 

Laughran  v.  Smith  97 

Lauman     v.     County     of     Des 

Moines  246 

Lavalley  v.  Ravenna  128 

Law  v.  Nunn  27 

Lawes  v.  Purser  62 

Lawrence  v.  American  Nat.  Bank  26 

v.  Beaubien  35,  39 

v.  Dale  266 

*.  Gullifer                               174,  178 

v.  Miller  177 

v.  Taylor  266 

Lawson's   Admrs.    v.    Hansbor- 

ough  185 

Lawson's  Extr.  v.  Lawson  277 

Lawton  v.  Campion  17 

v.  Howe  23 

Layer  v.  Nelson                          253,  254 

Lazell  v.  Miller  229 
L.    Craddock   &    Co.    v.   Wells- 

Fargo  Co.,  Express  124 

Lea  v.   Board  of  Commrs.  161 

Leach  v.  Vining  34 

Leather  v.  Simpson  91 
Leather    Manufacturers'    Bank 

v.  Merchants'  Bank  32,  33 

Lee  v.  Ashbrook  175 

v.  Flemingsburg  46 

».  Lee  48 

Leeds  Banking  Co.,  In  re  68 

Lehigh    Coal    &    Nav.    Co.    c. 

Brown                                  218,  220 

Leigh  v.  Dickeson  208 

Leighton  v.  Preston  277 

xli 


Leonard  v.   Burlington   Mutual 

Loan  Assn.  72,  75,  79 

v.  City  of  Canton  161 
Lemans  v.  Wiley                            18,  23 

Lemmon  v.  Beeman  69 

Lemon  v.  Grosskopf  148 

Lerch  ».  Emmett  205 
Leroux  v.  Brown                            66,  93 

Le  Sage  v.  Coussmaker  48 

Leslie  v.  Smith  64 

Lester  v.  Palmer  62 
Levy  v.  Bank  of  United  States 

85,182 

v.  Gillis  46 

v.  Kansas  City  135 

v.  Terwilliger  23 

L.  E.  Waterman  Co.,  In  re  246 

Lewellen  v.  Garrett  14 

Lewis  v.  Brinkley  262 

v.  Campbell  252 

v.  Chicago,  etc.,  R.  Co.  233 

v.  Courtright  190 

v.  Overby  185 

v.  White's  Bank  90 

Lewy  v.  Crawford  152 

Liardet  v.  Hammond,  etc.,  Co.  62 

Libert  v.  Unfried  226 

Liddard  v.  Lopes  120 

Lightbown  v.  McMyn  205 

Lightly  v.  Clouston  285 

Ligonier,  Town  of,  v.  Ackerman  244 

Lillard  v.  Wilson  51 

Limited    Investment    Assn.    v. 

Glendale  Investment  Assn.  289 
Lincoln  Land  Co.  v.  Village  of 

Grant  161 
Lindner  v.  Cape  Brewery,  etc., 

Co.  174 

Lindon  v.  Ho6per                      216,  284 

Lindsey  ».  Allen  238 

List  v.  Hornbrook  48 

Litchfield  v.  Ballou  161 

Little  v.  Bunce  234 

v.  Dawson  48 

Livingston  v.  Bishop  295 

v.  Burton  226 

Livingstone  v.   Rawyards   Coal 

Co.  190 

LIula,   Succession  of  51 

Loan,  etc.,  Assn.  v.  Holland  215 

Loch  Garve,  The  206 

Lockard  v.  Barton  284 

Locke  v.  Smith  202 

Lockman  v.  Cobb  152 

Lockwood  v.  Barnes  95 


TABLE   OF   CASES 
[References  are  to  Sections] 


Lockwood  j>.  Thunder,  etc.,  Boom 

Co.  284 

Logan  v.  Le  Mesurier  128 

v.  Sumter  231 
Logan    County    Nat.    Bank    v. 

Townsend  156,  159 

London,  etc.,  Bank  D.  Bank  of 

Liverpool  31,  80,  87 

Lonergan  v.  Buford  216 

Long  v.  Finger  102 

v.  Lemoyne  Borough  161 

v.  Village  of  Dundee  243 

Longchamp  v.  Kenny  273 
Lord  v.  Wheeler  116,  117 
Loring  v.  Bacon  49,  208 
Los  Angeles  Traction  Co.  v.  Wil- 

shire  265 
Lothrop  v.  Michaelson  189 
Lott  c.  Sweezey  232 
Loughridge  &  Bogan  v.  Bowland  253 
Louis  Werner  Stave  Co.  v.  Pick- 
ering 190 
Louisiana  v.  Wood  156 
Louisville  t>.  Henning  37 
Louisville,  etc.,  R.  Co.  v.  Com- 
monwealth 37 
Louisville  Foundry,  etc.,  Co.  v. 

Patterson  116 

Love  v.  Harvey  152 

Lovejoy  v.  Kaufman  148 

0.  Lee  216 

v.  Murray  289,  295 

Lovell  t).  Simpson  219 

Lowe  r>.  Waller  224 

Lowenstein  v.  Bache  216 

Lowry  v.  Bourdieu  144 

Loyd  v.  Lee  68 

Lucas  v.  McGuire  98 

v.  Worswick  14 

Luey  v.  Bundy  96 

Luke  v.  Lyde  120 

Luther  v.  Wheeler  161 

Luton  v.  Badham  102 

Lyle  v.  Siler  185 

Lynchburg  Nat.  Bank  v.  Scott  224 

Lyon  v.  Gormley  190 

v.  Receiver  of  Taxes  238 

Lythgoe  v.  Vernon  298 

Lytle  v.  Bank  of  Dotham  295 

Lyttle  o.  Davidson                     95,  108 

M 

Maas  v.  Montgomery  Iron  Works  262 
McAllister-Coman  Co.  v.  Mat- 
thews 263 


McArthur  v.  Luce  17,  42 

v.  Murphy  279 

McBroom    v.    Scottish    Invest- 
ment Co.  225 
McCabe  v.  Shaver                            216 
McCall  v.  Corning  80 

v.  Whaley  144 

McCammon  v.  Peck  130 

McCaulley  v.  Jenney  66,  74 

McClary  v.  Michigan  Cent.  R. 

Co.  19,  179 

McClay  v.  Hedge  167,  175,  178 

McClellan  v.  Filson  205 

v.  Harris  122 

McClelland  v.  McClelland  262 

Macclesfield       Corporation      v. 

Great  Central  R.  Co.  210 

McClung  v.  Sieg  185 

McClure  v.  Lenz  48,  51 

McConnell  v.  McConnell  202 

McCook  County  v.  Kammoss  204 
McCormick,  etc.,  Co.  v.  Miller  214 
McCoy  v.  Grandy  187 

v.  Louisville,  etc.,  R.  Co.  297 

McCracken  v.  Sanders  106,  107 

McCrowell  v.  Burson  95 

McCue,  Matter  of,  v.  Supervi- 
sors 246 
McCue  v.  Wapello  County               287 
McCulloch  v.   Royal   Exchange 

Assurance  Co.  61 

McCullough  v.  Baker       262,  265,  268 

v.  McCready  205 

McCurdy  v.  County  of  Shiawas- 

see  161 

McCutcheon  v.  Merz  Capsule  Co.  144 
McDaniel  v.  Hutcherson  95 

McDearman  v.  McClure  208 

MacDonaghs,  In  re  254 

McDonald  v.  Lund  149 

v.  Mayor  66,  161 

v.  Napier  27,  234 

v.  Rankin  187 

McDonough  c.  Evans  Marble  Co.     176 

v.  Webster  152 

McElroy  v.  Carmichael  152 

».  Ludlum  104,  105 

v.  Minn.  Percheron  Horse  Co.     160 
McElwee  v.  Wilce  233 

McEndree  v.  Morgan  185 

McFadden  v.  Henderson  267 

McGartland  v.  Steward  98 

McGarvey  v.  Roods  51 

McGee  v.  Long  226 

v.  Overby  295 


xlii 


TABLE    OF   CASES 


[References  are  to  Sections] 


McGonigal  o.  Klein 
McGoren  v.  Avery 
McGrath  v.  Kennedy 
MacGreal  v.  Taylor 
McGregor  v.  Erie  R.  Co. 
Mclntyre  v.  Ward 
Mack  v.  Bragg 
McKee  v.  Manice 

v.  Phoenix  Ins.  Co. 
McKibben  v.  Doyle 
McKiernan  v.  Valleau 
McKinney  v.  Harvie 

v.  Springer 


175 
60 

152 

69 

220 

248 

98 

152 

262 

15 

75 

98 

175,  178 


McKleroy  v.  Southern  Bank  80 

McKnight  v.  Bertram  Heating, 

etc.,  Co.  175,  178 

Mackrell  v.  Simond  120,  121 

McLane  v.  Kelly  284 

McLaughlin  v.  Barnum  187 

McLennan  v.  Whiddon  152 

McMannus  v.  Lee  289 

McManus  v.  Cassidy  264 

McMillan  v.  Malloy  175,  178 

v.  Vanderlip  174 

McMullen  v.  Hoffman 

135,  143,  148,  149 

McMurtie  v.  Keenan  217 

McMurty  ».  Kentucky  Central 

R.  Co.  37 

McNamee  v.  Withers  102 

McNaughton  v.  Elkhart  258 

McNeelyCo.D.  Bank  of  N.America   92 
Macomb,  City  of,  v.  County  of 

McDonough  204 

McSorley  v.  Faulkner  275,  280 

Maddison  v.  Alderson          66,  93,  101 
Madigan  v.  Walsh  66,  93 

Madison  v.   American  Sanitary 

Engineering  Co.  175 

Madison,  County  of,  v,  Haskell     204 
Madland  v.  Beuland  187 

Madras,  The  112 

Madsen  v.  Whitman  226 

Maffet  v.  Oregon,  etc.,  R.  Co.         263 
Maghee  v.  Kellogg  234 

Magnolia,  Town  of,  v.  Sharman     238 
Mahan  v.  Close  101 

Maker  v.  Millers  25,  27 

v.  Van  Horn  152 

Main  v.  Casserly  160 

Major  v.  Tardos  179 

Malbon  ».  Binney  175 

Male  v.  Wink  226 

Manhattan   Fire  Alarm  Co.  v. 

Weber  195,  196 


Manhattan  Life  Insurance  Com- 
pany v.  Buck  124 
Manitowoc  Steam  Boiler  Works 

v.  Manitowoc  Glue  Co.  175 

Mann  v.  ^Etna  Ins.  Co.  233 

Mannie  Swan,  The  206 

Manning  v.  Johnson  69 

v.  North  British,  etc.,  Ins.  Co.  128 

v.  Wells  203 

Mansfield  v.  Lynch  35,  37,  185 

Manton  v.  Gammon  262 

Manufacturers'    Nat.    Bank    v. 

Swift  182 

Manville  v.  Belden  Mining  Co.  159 

Manwood  v.  Bruston  2 

Marcotte  v.  Allen  219 
Marine  Ins.  Co.  v.  China,  etc.,  Co.  49 
Marine  Nat.  Bank  v.  Nat.  City 

Bank  80 

Marion  Mfg.   Co.  v.  Buchanan  128 

Marks  v.  Tichenor  128 

Marple  v.  Morse  51 

Marriot  v.  Hampton  229 

Marsh  v.  Pier  295,  296,  300 

v.  Port  Harbour  Co.  216 

v.  Wyckoff  108 

Marshall  v.  Rutton  68 

Marshall,  City  of,  v.  Snediker  242 

Marshall  County  v.  Rivera  204 

Marston  v.  Swett  62 

Martin  v.  Allen  27 

v.  Home  Bank  23,  32 

v.  McCormick  60 

v.  Martin  51 

v.  Seabaugh  149 

v.  Sitwell  61 

v.  Woodruff  232 

v.  Wright's  Admrs.  48 

Martindale  v.  Falkner  36 

Marvin  v.  Mandell  222 

Maryland  Casualty  Co.  t>.  Little 

Rock,  etc.,  Co.  35 

Mason  v.  Lawing  265 

v.  McLeod  140 

v.  Waite                                   277,  279 

Massey  v.  Greenabaum  Bros.  262 

v.  Taylor,  Wood  &  Co.          174,  178 

Masson  v.  Swan    95, 102, 104, 106, 107 

Matheny  v.  Chester  209 

Mather  v.  Brokaw  174 

v,  Maidstone  90 

Mathers  v.  Pearson  281 

Mathews  v.  Davis                      102,  107 

Mathie  v.  Hancock  207 

Matthews  v.  Menedger 


xliii 


TABLE   OF    CASES 


[References  are  to  Sections] 


Matthews  v.  Paine  222 

v.  William  Frank  Brewing  Co.     218 

Maxwell  v.  Griswold  242 

v.   San  Luis  Obispo  238 

Maxwell  &  Delahomme  v.  Moore     175 

May  v.  Logan  288 

Mayberry  v.  Northern  Pacific  R. 

Co.  256 

Maye  v.  Tappan  190 

Mayer  t>.  Mayor,  etc.,  of  New 

York  183 

Mayfield  v.  Moore  287 

Mayhew  v.  Crickett  254 

v.  Thayer  203 

Maynard  v.  May  235 

Mayor  v.  Pyne  262 

Mayor,  etc.,  of  Baltimore  c.  Lef- 

ferman  215,  238 

Mayor,  etc.,  of  Jersey  City  c. 

Riker  237 

Mayor,  etc.,  of  Newport  v.  Saun- 

ders  284 

Mayor,  etc.,  of  New  York  v.  Erben  22 
Mayor,  etc.,  of  Richmond  ».  Judah  35 
Mead  v.  Degolyer  176 

Meader  v.  Cornell  262 

Meagher  v.  Carpenter  128 

Meech  v.  Stoner  152 

Meek  v.  McClure  244 

Meem  v.  Dulaney  226 

Melton  v.  Snow  222 

Memphis  Gaslight  Co.  t>.  City 

of  Memphis  161 

Menetone  v.  Athawes  1 19 

Merchants'  Bank  v.  Foster  208 

».  Lutterloh  222 

Merchants'  Bank  v.  Mclntyre  27 
Merchants'  Ins.  Co.  v.  Abbott  19,  179 
Merchants'  Loan,  etc.,  Co.  v. 

Lamson  279 

Merchants'  Nat.  Bank  v.  Nat. 

Bank  of  Commonwealth  182 

v.  Nat.  Eagle  Bank  182 

Merrill  v.  Brantly  15 

Merryweather  v.  Nixan  255,  256 

Mersey  Steel  &  Iron  Co.  ».  Nay- 

lor  260,  263 

Messier  v.  Messier  48 

Metcalf  v.  Denson  25 

Metcalfe  v.  The  Brittania  Iron- 
works Co.  120 
Metropolitan  Life  Ins.  Co.  ». 

Blesch  37,  141 

Metropolitan  Stock  Exch.  v. 

Lyndonville  Nat.  Bank     154,  160 


Metschan  ».  Grant  County  232 
Michaels  v.  Central  Kentucky 

Asylum  202 

Michel  v.  Halheimer  262 

Michel  Brewing  Co.  v.  State     215,  242 

Michigan  Yacht  Co.  v.  Busch  177 

Milkman  v.  Ordway  101 

Miller  v.  Fenton  256 

t>.  Goddard  174 

v.  Hyde  295 

v.  Inhabitants  of  Somerset  204 

v.  Insurance  Co.  160 

v.  Larson  135 

v.  Miller                                 277,  294 

v.  Roberta  106 

v.  Smith  69 

v.  Tobie  102 

Mills  v.  Barney  80 

v.  Joiner  95 

v.  Osawatomie                        266,  267 

c.  The  Alderbury  Union  179 

Mills'  Guardian  v.  City  of  Hop- 

kinsville  238 
Minch,  The  C.  P.  206 
Miner  v.  Bradley  262,  265 
Miners'  Trust  Co.  Bank  v.  Rose- 
berry  222 
Minneapolis  Mill  Co.  v.  Wheeler  258 
Minnie  E.  Kelton,  The  206 
Minor  v.  Baldridge  272,  281,  289 
Mitchell  v.  Caplinger  175 
v.  Fish  149 
v.  Gile  262 
v.  Orr  152 
Mixer  v.  Mixer  282 
Mizell  v.  Watson  265,  266,  267 
Mobile,  etc.,  R.  Co.  v.  Steiner  220,  221 
Modern  Woodmen  v.  Vincent  265 
Moffett  v.  People  40 
Moline,  etc.,  Co.  v.  Neville  207 
Moller  v.  Tuska  266 
Monaghan  v.  Lewis  244 
Monarch  v.  Board  of  Commrs.  268 
Monarch  Cycle  Co.  c.  Royer 

Wheel  Co.  263 
Monongahela  Nat.  Bank  v.  First 

Nat.  Bank  148 

Monongahela  Nav.  Co.  v.  Wood  220 
Monroe  Nat.  Bank  v.  Catlin     22,  37 

Montague  v.  Garnett  95 

Montgomery  v.  Cowlitz  County  239 
Montgomery's  Appeal 

Montriou  v.  Jefferys  36 

Moody  v.  Moody  209 

Moore  v.  Appleton  258 


xliv 


TABLE    OF   CASES 


[References  are  to  Sections] 


Moore  v.  Bare  265 

o.  Board  of  Regents  262,  265 

v.  Bruner  254 

v.  Capewell  Horse-Nail  Co.       104 

v.  Fitzwater  17 

v.  Mayor  161 

v.  Stevens  73 

v.  Vestry  of  Fulham  228 

v.  Williams  63 

Moors  v.  Bird  29 

Morck  v.  Abel  135 

Morehead  v.  Watkyns  97 

Morford  v.  Mastin  175 

Morgan  ».  Beaumont  152 

v.  Groff  148 

v.  Hart  236 

v.  Palmer  219 

v.  Scott  128 

Morgan  Park  v.  Knop.  40 

Morin  v.  Robarge  262 

Morrill  v.  Nightingale  214 

v.  Palmer  282 

Morris  v.  Jones  &  Spence  73 

v.  Porter  185 

v.  Robinson  298 

j>.  Tarlin  22 

Morris  &  Johnson,  Ex  parte  234 

Morrison  c.  Bennett  149 

v.  Ives  262 

v.  Jones  48 

v.  Poyntz  254 

v.  Robinson  284 

Morrison,  Town  of,  v.  Town  of 

Hardwick  204 

Morse  v.  Ely  69 

v.  Woodworth  214 
Morville  v.  Am.  Tract  Society 

156,  160 

Moses  v.  Macferlan  2,  6,  229 

Mosteller's  Appeal  51 

Mott  v.  Mott  70 

Motz  v.  Mitchell  216 

Moulton  v.  Bennett  41 

v.  Smith  205 

Mount  v.  Waite  140 

Mowatt  v.  McLelan  27 
c.  Wright                                     13,  17 

Moyer  v.  Shoemaker     4  23 
Moyer's  Appeal                              50,  51 

Mugan  v.  Regan  &  Co.  263 

Muller  o.  White  68 

Mulligan  v.  Kenny  197 

Mullin  ».  Bloomer  267 

Mumford  v.  Brown  208 

Mundorff  v.  Kilbourn  48 


Municipal  Security  Co.  v.  Baker 

County  161 

Munro  v.  Butt  116,  164,  175 

Munt  v.  Stokes  22 

Murphey  v.  Davey  248 

Murphy  v.  City  of  Wilmington     239 

v.  De  Haan  104 

v.  Sampson  174,  178 

Murray  v.  Moorer  230 

Mussen  v.  Price  262 

Musson  v.  Fales  141,  142 

Mutual,  etc.,  Ins.  Co.,  In  re  134,  160 

Mutual  Life  Ins.  Co.  v.  Mayor     237 

Myers  v.  Meinrath  153 

v.  Smith  250 


N 


Nanson  v.  Jacob 
Narman  v.  Will 
Nash  v.  Inman 
v.  Towne 


298 

14 

202 

262 


Nashua    Iron    &    Steel    Co.    ». 

Worcester,   etc.,   R.  Co.  258 

Natalizzio  v.  Valentino  174 

National  Bank  v.  Bangs  80,  92 

v.  Berrall  182 

v.  Dushane  227 

v.  Lewis  227 

National  Bank  and  Loan  Com- 
pany 0.  Petrie  142 
National  Bank  of  Commerce  v. 

Nat.  M.  B.  Assn.  80,  92 

National     Bank     of     Common- 
wealth v.  Grocers'  Nat.  Bank     80 
National  Cash  Register  Co.  v. 

South  Bay,  etc.,  Assn.  128 

National,  etc.,  Building  Society, 

In  re  158 

National    Gold    Bank    v.    Mc- 
Donald 182 
National  Granite  Bank  v.  Tyndale  68 
National  Home  Bldg.  Assn.  v. 

Home  Sav.  Bank  154,  160 

National  Life  Ins.  Co.  v.  Jones  13 

National  Oil  Refining  Co.  v.  Bush  284 
National   Park   Bank   v.   Ninth 

Nat.  Bank  80 

v.  Seaboard   Bank  25 

v.  Steele,  etc.,  Co.  182 

National  Surety  Co.  v.  Di  Mar- 

sico  254 

National  Trust  Co.  v.  Gleason  272, 289 
Naylor  v.  Winch  42 

Neale  v.  Rouse  226 

Neate  v.  Harding  277,  289 


xlv 


TABLE   OF   CASES 


[References  ore  to  Sections] 


Nebraska  Bitulithic  Co.  t>.  City 

of  Omaha  161 

Needles  v.  Burk  18,  44 

Neeld  v.  Cunningham  187 

Negro  Franklin  r.  Waters  184 

Negro  Peter  v.  Steel  184,  286 

Nelichka  t>.  Esterly  174 

Nelson  v.  Cork  258 

v.  Illinois,  etc.,  R.  Co.  296 

v.  Shelby  Mgf.  Co.  99 

Neumann  v.  City  of  La  Crosse     238 
Nevin  v.  Man  kin  183 

Newburyport,  City  of,  v.  Fidel- 
ity, etc.,  Ins.  Co.  293 
v.  Spear  279 
New  Castle,  etc.,  R.  Co.  v.  Simp- 
son                                     156,  159 
New  Haven,  The                              206 
New  Holland  Turnpike  Co.  v. 

Ins.  Co.  61 

New  Orleans,  etc.,  R.  Co.  ».  Press- 
ley  262 
v.  Turcan  207 
Newport,  Mayor,  etc.,  of,  v.  Saun- 

ders  284 

New  York  v.  Corn  258 

v.  Erben  22 

v.  Hearst  258 

New    York    Brokerage    Co.    c. 

Wharton  263 

New  York  Guaranty,  etc.,  Co.  c. 

Gleason  289 

New  York  Life  Ins.  Co.  v.  Chit- 

tenden  17 

v.  Seyms  124 

v.  Statham  124,  126 

New  York  Security  Co.  v.  Davis     226 

Newall  v.  Tomlinson  25,  27,  179 

Newberry  v.  Ruffin  262 

Newdigate  ».  Davy  230 

Newell  v.  Hadley  72 

Newhall  v.  Wyatt  279 

Newman  ».  McGregor  262 

v.  Reagan  174 

v.   Supervisors  of  Livingston 

County  238 

Newton  v.  Thornton  187 

Niblo  v.  Binsse  116,  118 

Nichol  v.  Thomas  70 

Nichols  v.  Bellows  222,  225 

v.  Bucknam  248 

v.  MacLean  287 

v.  Skeel  222 

Nicholson  v.  Chapman  207 

Nickerson  v.  Wheeler  256 


Nicol  v.  Fitch  262 

Nicrosi  v.  Walker  226 
Niedermeyer  v.  Curators  of  the 

University   of    Missouri  219 

Nield  v.  Burton  300 
Nielson  v.  International  Text 

Book  Co.  69 
Niesh  v.  Gannon  51 
Nightingale  v.  Eiseman  176 
Nolan  v.  Whitney  175 
Nollman  v.  Evenson  179 
Norden  v.  Jones                         273,  283 
North  v.  Mallory  262 
v.  Walthamstow  Urban  Coun- 
cil 215 
North     Carolina     R.     Co.     v. 

Commrs.  of  Alamance  246 

Northampton  Nat.  Bank  v.  Smith  23 

Northington,  Ex  parte  202 
Northrop's  Executors  v.  Graves 

34,  37,  185 

Northrup  v.  Foot  142,  153 

Northwestern  Mut.  Life  Ins.  Co. 

v.  Elliott  141 
Northwestern  Union  Packet  Co. 

v.  Shaw  160 
North  Whitehall,  Overseers  of, 
v.  Overseers  of  South  White- 
hall 204 
Norton  v.  Bliim  148 
v.  Bohart  181 
v.  Coons                                   253,  254 
v.  Derby  Nat.  Bank  160 
v.  Marden                                    15,  43 
v.  U.  S.  Wood  Co.  175 
Norvell  v.  Hedrick  226 
Nothe  v.  Nomer  265 
Noyes  v.  Parker  179 
v.  Pugin  268 
Nunez  v.  Morgan  93 
Nunn  v.  Bird  226 
Nye  v.  Malo  226 

O 

Oakland     Cemetery     Assn.     v. 

County  of  Ramsey  241 

Oates  v.  Hudson  216 
Obear  v.  First  Nat.  Bank  66,  93 

O'Brien  •o.  Flint  187 
Ocean  Prince,  The  [Kidney  v. 

The  Ocean  Prince]  206 
Oceanic  Steam  Nav.  Co.  c.  Com- 

pania    Transatlantica    Es- 

panola  258 


xlvi 


TABLE   OF   CASES 


[References  are  to  Sections] 


Oceanic  Steam  Nav.  Co.  v.  Tappan  242 

O'Connor  v.  Clopton  27 

Oddie  v.  Nat.  City  Bank  182 

Offley  &  Johnson's  Case  254 

Ogden  v.  McHugh  184 

v.  Maxwell  219 

Odgen  City  ».  Weber  County  204 

Ogle  v.  Baker  229 

O'Harre  v.  Hall  229 

Ohlert  v.  Alderson  180 

Okerson  v.  Crittenden  152 
Old  Dominion,  etc.,  Co.  v.  Bige- 

low  296 

Oldham  v.  Broom  253 

Oliphant  v.  Markham  216 

Olive  v.  Olive  277 

Olive  Branch,  The  206 

Olmstead  v.  Beale  174 

Olson  v.  Brison  267 

Olympia,  The  206 

O'Neill  v.  Supreme  Council  263 

Orchis,  The  248 

Orear  v.  Botts  102 

O'Reilly  v.  Kelly  205 
Osborn  v.   Governors  of  Guy's 

Hospital  48 
Osborne  v.  High  Shoals  Mining, 

etc.,  Co.  74 

v.  Williams  141 
Osburn  v.  South  Shore  Lumber 

Co.  128 

Osier  v.  Hobbs  46 

Osterhout  v.  Roberts  295 
Otis  v.  Inhabitants  of  Stockton 

72,  161 

v.  People  243 
v.  Strafford  204 
Otoe  County  v.  Lancaster  County  204 
Otto  v.  Young  298 
Ottoway  v.  Milroy                     262,  265 
Overseers  of  North  Whitehall  v. 
Overseers  of  South  White- 
hall 204 
Oxendale  v.  Wetherell  176 


Pabst  Brewing  Co.  v.  Listen 
Pace  v.  Pace's  Admr. 
Pache  v.  Oppenheim 
Pacific  Coast  Co.  v.  Wells 
Packer  &  Field  v.  Byrd 
Padgett  v.  Decker 
Page  v.  McDonnell 
v.  Page 


152 
254 
205 
246 
143 
108 
177 
51 


Paine  v.  Meller  128 

Painter  v.  Polk  County  40 

Palmer  v.  Wick  &  Pulteneytown 

Steam  Shipping  Co.  256 

Panton  v.  Duluth  Gas  and  Water 

Co.  218 

Parcher  v.  Marathon  County  238 

Pardey  v.  American  Ship  Wind- 
lass Co.  69 
Parke  v.  Roser  80 
Parker  v.  Great  Western  R.  Co.     220 
v.  Lancaster                                     215 
v.  Macomber                                   122 
v.  Panhandle  Nat.  Bank              298 
v.  Stevens                                         187 
v.  Tainter                                         102 
v.  Vinson                                          187 
Parker's  Heirs  v.  Parker's  Admr.     51 
Parkersburg  v.  Brown                        156 
Parks  v.  Morris,  Layfield  &  Co. 

283,  284 

Parsons  v.  Moses  187 

Pass  v.  McLendon  187 

Patrick  v.  Putnam  122,  125 

v.  Town  of  Baldwin  204 

».  Woods  189 

Patterson  v.  Patterson  205 

v.  Prior  272,  286,  289 

v.  Reardon  187 

v.  Stoddard  97 

v.  Yeaton  102 

Paul  v.  City  of  Kenosha  23,  60 

Paul  v.  City  of  Seattle  161 

Paulson  v.  Barger  215 

Payne  v.  Pomeroy  262 

v.  Witherbee,  Sherman  &  Co. 

15,  179 

Payne's  Appeal  184,  282 

Peabody  v.  Fellows  95 

Pearl  v.  Whitehouse  17 

Pearson  v.  Lord  179 

v.  Skelton  256 

Peck  v.  Ellis  256 

v.  McLean  234,  235 

Peebles  v.  Pittsburg          215,  216,  244 

Peerless  Glass  Co.  v.  Pacific 

Crockery,  etc.,  Co.  52 

Peet  v.  City  of  East  Grand  Forks  263 
Pelletier  v.  State  Nat.  Bank  25 
Pemberton  v.  Williams  216 

Penhallow  v.  Doane  234 

Pennington     County    Bank    c. 

First  State  Bank  80 

Pensacola,  etc.,  R.  Co.  v.  Brax- 

ton  22,  25 


xlvii 


TABLE   OF   CASES 


[References  are  to  Sections] 


Penter  ».  Roberts  51 

People  t>.  Cornell  232 

r>.  Foster  40 

v.  Miller  287 

v.  Smyth  287 

People  ex  rel.  v.  Supervisors  of 

Otesego  County  246 

v.  Whemple  246 

People's  Bank  v.  Franklin  Bank 

80,  88,  92 

People's  Savings  Bank  v.   Cupps  88 
.   v.  Heath  229 

Peoria  Star  Co.  v.  Cutright  156 

Pereuilhet,  Succession  of  51 

Perkins  v.  Eaton  152 

Perry  v.  Newcastle,  etc.,  Ins.  Co. 

14,  35 

Perry  o.  Smith  262 

Perry,  County  of,  v.  City  of  Du 

Quoin  204 

Person  v.  Stoll  262 

Peter,  Negro,  v.  Steel  184,  286 

Peterborough  v.  Lancaster  15 

Peterborough   Nat.    Bank    v.    Childs 

227 

Peters  v.  Gallagher  49 

v.  Grim  148 

Peters   Grocery   Co.   v.    Collins 

Bag  Co.  263 

Peters,  Rickers  &  Co.  v.  R.  Co.     220 
Peterson  v.  City  of  Ionia  161 

v.  Mayer  174 

v.  Pusey  262 

Petit  v.  Flint,  etc.,  R.  Co.  189 

Petticolas  v.  City  of  Richmond       295 
Peyser  v.  Mayor  of  N.  Y.  239 

Pfeuffer  v.  Maltby  149 

Phares  t.  Jaynes  262 

Phelan  v.  San  Francisco  239 

Phelps  v.  Church  of  Our  Lady 

283,  284 

p.  Mineral  Spring  Heights  Co.      265 

v.  Williamson  129 

Phelps  &  Johnson  v.  Zuschlag         214 

Phenix  Ins.  Co.  v.  Billiard  128 

Phetteplace  v.  Bucklin 

25,  26,  28,  179,  185 
Philadelphia  v.  Collector  244 

v.  Tripple  268 

Philanthropic  Building  Assn.  v. 

McKnight  222 

Philbrook  v.  Bel  knap  93 

Phillips  v.  Herndon  267 

v.  Homfray  275,  284 

Phillips  Extr.  c.  McConica  185 


Phinizy  v.  Guernsey  128 

Phinney  v.  Foster  248 

Phoenix  Bridge  Co.  v.  Creem  258 

Phoenix,  etc.,  Co.,  In  re  263 
Phcenix    Life    Assurance    Co., 

Re  157 
Phoenix  Mut.  Life  Ins.  Co.  v. 

Baker  262,  265 

Pickslay  v.  Starr  46 

Pidgin  0.  Cram  203 

Pierce  v.  Paine  104 

Pierpont  v.  Wilson  203 

Pierson  v.  Spaulding  262 

Pierson's  Estate,  In  re  299 

Pike  v.  Bright  273 

v.  Fitzgibbon  68 
Pike  Electric  Co.  v.  Richardson 

Drug  Co.  116 
Pinches  v.  Swedish  Church  175,  178 
Pine  Forest,  The  206 
Pine  Tree  Lumber  Co.  t>.  Chi- 
cago, etc.,  R.  Co.  220 
Pingree  v.  Mutual  Ins.  Co.  15 
Pinkham  v.  Libbey  130 
Pironi.0.  Corrigan  262 
Pitcher  v.  Turin  Plank  Road 

Co.                                      >  183 
Pitman  v.  Hooper 

3  Sumn.  50                          121,  129 
3  Sumn.  286  121 
Pittsburg  Plate  Glass  Co.  v.  Mc- 
Donald 179 
Pixler  v.  Nichols  174 
Plaisted  v.  Palmer     141,  142,  143,  153 
Planche  v.  Colburn  262 
Plant  ».  Gunn  214 
Platt  v.  Bromage  22 
Plymouth  v.  Throgmorton  122 
Plymouth  Rock,  The  206 
Poche  o.  New  Orleans  Co.  265 
Poe  v.  Dixon  253 
Police  Jury  v.  Hampton  191 
Pollard  v.  Bank  of  England  182 
Pooley  v.  Brown  31 
Poor  District  of  Summit  v.  Byers  240 
Pope  v.  Benster  231 
Port  Victor,  The  Cargo  ex  206 
Porter  ».  Arrowhead  Co.  263 
v.  Mount  222 
v.  Powell  203 
v.  Roseman  279 
v.  Whitlock  174 
Portland  Gold,  etc.,  Mining  Co. 

o.  Stratton's  Independence  296 

Posey  v.  Garth  174 


xlviii 


TABLE    OF   CASES 


[References  are  to  Sections] 


Potomac  Coal  Co.  v.  Cumber- 
land, etc.,  R.  Co.  220 
Potter  v.  Carpenter  46 
Powder  River  Cattle  Co.  v.  Bd. 

of  Commrs.  237 

Powell  v.  Bunger  35 

v.  Dayton,  etc.,  R.  Co.  128 

v.  Howard  175 

v.  Matthis  254 

v.  Rees  283 

Pray  v.  Stinson  201 

Preble  v.  Bottom  262,  263 

Presbyterian  Church  v.  Hoopes, 

etc.,  Co.  175 
Prescott  v.  White  174 
Prescott  Nat.  Bank  v.  Butler  160 
Pressnell  v.  Lundin  95 
Preston  v.  Canadian  Bank  182 
v.  City  of  Boston  238 
v.  Hawley  284 
v.  Neale  207 
Pretzinger  v.  Pretzinger  203 
Prewett  v.  Coopwood                141,  142 
Price  v.  Furman  69 
v.  Neal        80,  81,  82,  83,  84,  87,  88 
Prickett  v.  Badger  262 
Prince,  The  Ocean  206 
Prince  v.  McRae  47 
Proctor  ».  Smith  189 
Providence  v.  Providence  Elec- 
tric Light  Co.  161 
Pryor  v.  Morgan  277 
Puebla,  The  City  of  206 
Pugh  v.  Bell  187 
Pulaski  County  v.  Senn  246 
Pulbrook  v.  Lawes            102,  103,  107 
Pullen  v.  Green  174 
Pullman  v.  Corning  175 
Pullman  Co.  v.  Hoyle  258 
Pullman's  Palace  Car  Co.  ».  Cen- 
tral Transp.  Co.                 156,  159 
Pusey  &  Jones  Co.  v.  Dodge  262 
Putnam  v.  Ritchie  187 
r>.  Tyler  187 

Q 

Quarton    v.    Amer.    Law    Book 

Co.  263 

Queen  v.  Mayor  of  Tewksbury  36 

Quillian  v.  Johnson  152 

Quimby  v.  Lowell  273 

Quin  v.  Hill                                 196,  205 

Quinlan  v .  Gordon  226 

Quinnett  v.  Washington  216 

Quynn  v.  Staines  187 


R 


Raffles  v.  Wichelhaus  52 
Railroad  Co.  v.  Commrs.  238,  244 
Railroad  Nat.  Bank  v.  City  of 

Lowell  75 

Raisler  v.  Mayor  of  Athens  238 

Ramey  v.  Slone  96 

Randle  v.  Stone  &  Co.  128 

Randolph  v.  Merchants'  Bank  91 

v.  Town  of  Greenwood  204 

Rannells  v.  Gerner  70 

Ransom  ».  Hayes  222 

v.  Masten  179 

Raoul  v.  Newman  201 
Ratterman  v.  American  Express 

Company  242 
Raub  v.  Smith                                66,  93 

Raun  v.  Reynolds  232 
Rawson  v,  Bethesda  Baptist 

Church  35 
v.  Clark                                    116,  118 
Ray  v.  Honeycutt  205 
Ray  &  Thornton  v.  Bank  of  Ken- 
tucky 179 
Raymond  v.  Bearnard              262,  267 
Reams  v.  Wilson  262 
Reddington  v.  Henry  262 
Redington  v.  Woods  80 
Reeder  v.  Anderson's  Admrs.  207 
Reeves'  Estate  v.  Moore  51 
Regina  v.  Twose  36 
Reichard  v.  Warren  County  161 
Reid  v.  Rigby                           72,  75,  79 
Reina  v.  Cross  129 
Renpor,  The  201 
Rex  v.  Hall  36 
Reynolds  v.  Board  of  Supervisors  204 
v.  Hosmer  235 
».  Johnston  102 
v.  Jourdan  268 
v.  Lynch  265 
v.  McCurry  69 
v.  Nelson  266 
v.  Padgett  277 
v.  Reynolds,  55  Ark.  189 
74  Vt.  101 
v.  Sweetser  203 
Rhea  v.  Allison                  101,  102,  107 
v.  White  256 
Rheel  v.  Hicks  17 
Rhodes,  In  re  202 
Rhodes  v.  Ashurst  62 
v.  Hinds                                   118,  119. 
v.  Stone  51 


xlix 


TABLE   OF   CASES 


[References  are  to  Sections] 


Rhymney  R.  Co.  ».  Brecon,  etc., 

R.  Co.  263 

Rice  r.  Ashland  County  161 

v.  Partello  268 

T>.  Reed  300 

Richards  v.  Allen  95,  106,  108 

v.  Shaw  176,  178 

Richardson  v.  Bales  33 

v.  Duncan  214 

v.  Strong  201,  202 

D.  Young  120 

Richey  v.  Clark  25 

Richmond   Guano   Co.   v.   Far- 
mers' Cotton,  etc.,  Co.     156,  159 
Richmond,  Mayor,  etc.,  of,  v.  Judah 

35 

Richter  t>.  Union  Land  Co.  262 

Riddell  v.  Peck- Williamson,  etc., 

Co.  175 

Ridgway  v.  Hungerford  Market 

Co.  174 

Riiff  v.  Rube  104 

Riley  t>.  Rhea  254 

v.  Williams  98,  100 

Ripley  v.  Chipman  174 

v.  Gelston  219 

v.  Hazelton  267 

Ritchie  v.  Carter  232,  233 

Riverside    Bank    v.    First    Nat. 

Bank  182 

Riverside  Residence  Co.  v.  Hus- 

ted  262 

Roach  v.  Whitfield  &  Hannah     128 

Robb  v.  San  Antonio  St.  R.  97 

Robbins  v.  Town  of  Homer  204 

Roberts  v.  Evans  273,  277,  279 

v.  Havelock  119 

v.  Moss  283,  298 

v.  Swift  48 

Robertson    v.    Frank    Brothers 

Company  242 

Robeson  v.  French  142,  153 

v.  Niles  48 

Robins  v.  Latham  244 

Robinson  v.  Boyd  254 

v.  Charleston  35 

v.  City  of  Burlington  246 

v.  Gumming  48 

v.  Ezzell  219 

v.  Harkin  254 

v.  Reynolds  91 

r>.  Sanders  174 

Rodemer  v.  Hazelhurst  268,  269 

Rogers  «.  Brown  262 

v.  Greenbush  273 


Rogers  v.  Ingham  38,  42 

t>.  Price  205 

v.  Weaver  185 

Roselle  v.  Beckemeir                 143,  148 

Ross  t>.  Dowden  Mfg.  Co.  62 

v.  Irving  187 

r.  Supervisors  237 

Roth  v.  Palmer  278 

Rouvant  v.   San  Antonio   Nat. 

Bank  92 
Rowe  r.  Sam  Weichselbaum  Co.  300 
Rowland  t>.  Watson  217 
Ruabon  Steamship  Co.  c.  Lon- 
don Assurance  49 
Rudolf  v.  Malone  254 
Ruemmeli  v.  Cravens  148 
Rule  v.  Tait  287 
Rumford  Chemical  Works  ». 

Ray  238 

Rundell  v.  Bentley  209 

Rupley  v.  Daggett  52 

Russel  v.  Stewart  46 
Russell  v.  Courier  Printing,  etc., 

Co.  135 

Rutherford  v.  Mclvor  15,  32 

Rutland  R.  Co.  v.  Chaffee  187 

Ryan  v.  Bank  of  Montreal       80,  92 

v.  Dayton  122 


Sabine,  The  206 

Sage  v.  Shepard,  etc.,  Lbr.  Co.  279 
St.  Albans  Steamship  Co.  v.  Wil- 

kins  174 
St.  Anthony  Elevator  Co.  ».  Sou- 

cie  238 

St.  John  v.  Antrim  Iron  Co.  283 
St.  Joseph's  Orphan  Society  v. 

Walpert  46 
St.  Louis,  etc.,  R.  Co.  v.  Johnston  60 

v.  Terre  Haute,  etc.,  R.  Co.  146 
St.  Luke's  Hospital  Assn.  v. 

Grand  Forks  County  204 

Salb  v.  Campbell  99 

Salinas  v.  Aultman  &  Co.  187 

Salsbury  v.  City  of  Philadelphia  204 
Salt  Springs  Bank  v.  Syracuse 

Savings  Inst.  85,  89 

Sampson  v.  Shaw  143,  148 

Samuel  v.  Newbold  222 

v.  Thomas  205 

San  Antonio  v.  Smith  258 
Sandeen  v.  Kansas  City,  etc.,  R. 

Co.  273 


1 


TABLE    OF   CASES 


[References  are  to  Sections] 


Sanders  v.  Brock  177 

Sanderson  v.  Caldwell  295 

Sandoval  v.  Albright  287 

Sanford  v.  Emory's  Admr.  266 
San   Francisco,  etc.,    R.    Co.   v. 

Dinwiddie  239 
Sanner  v.  Smith  226 
Sarasohn  ».  Miles  281 
Sargent  v.  Currier  248,  251 
v.  Salmond  253 
Sauerhering  v.  Rueping  146 
Saunders  v.  Drew  129 
Savage  v.  McCorkle  209 
Savannah,  etc.,  R.  Co.  v.  Atkin- 
son 262 
Savannah  Savings  Bank  v.  Lo- 
gan 217 
Savary  v.  Clements  121 
Saville  v.  Welch  277 
Sawyer  v.  Lufkin  202 
Scanlan  v.  Cobb  70 
Scarf  v.  Jardine  298 
Scarisbrick  v.  Parkinson  104 
Sceva  v.  True  202 
Schanzenbach  v.  Brough  104 
Schappel  v.  First  Nat.  Bank  256 
Schierman  ».  Beckett  66 
Schillinger  v.  United  States  275,  288 
Schmidt  v.  North  Yakima  175 
Schmitt  v.  Gibson  141 
Schnabel  v.  Waggener  235 
Schneider  v.  Augusta  258 
Schoener  v.  Lissauer  141 
Scholey  v.  Halsey  232 
v.  Mumford  216 
School  Town  of  Carthage  ». 

Gray  122 

Schriber  v.  Le  Clair  222 

Schroeder  v.  Harvey  92 

Schultz  v.  Bd.  of  Comrs.  32,  33 

Schwartz  v.  Saunders  116 
Schwarzenbach  v.  Odorless,  etc., 

Co.  62 

Scott  v.  Board  of  Trustees  35,  37 

c.  Bush  99 

».  Ford  35 

v.  Leary  222 

v.  Maier  48 

v.  Slaughter  35 

Scottish  Ins.  Co.  v.  Herriott  242 

Seaburn  v.  Zachman  174 

Seagraves  v.   City  of  Alton  204 

Seaman  v.  Erie,  etc.,  R.  Co.  206 

Searl  v.  School  Dist.  187 

Sears  v.  Grand  Lodge  17 


Sears  v.  Leland  18 

v.  Marshall  County  239 

v.  Ohler  104 

Seattle  v.  Puget  Sound  Imp.  Co.     258 

Seavey  v.  Dana  277,  279 

Security  Bank  v.  Nat.  Bank  of 

Republic  80 

Segur  v.  Tingley  18 

Seibel  v.  Purchase  263 

Serber  v.  McLaughlin  175 

Seven  Coal  Barges  206 

Sewell  v.  Underbill  128 
Seymour  v.  Chicago,  etc.,  Life 

Co.  160 

Shaffner  v.  Pintchback  135 

Shain  v.  Sresovich  33 

Shakespeare  v.  Alba  66 

Shand  v.  Grant  27 

Shane  v.  St.  Paul  239 

Sharkey  ».  Mansfield  32 

Sharp  v.  Call  256 

v.  Gray  295 

v.  Taylor  149 

Shattuck  v.  Watson  147 

Shaw  v.  Badger  176 

v.   City  and   County  of  San 

Francisco  161 

v.  Shaw  98 

v.  Woodcock  216 

Shearer  v.  Fowler  45,  68 

Sheffield  v.  Hamlin  181 

Sheibley  v.  Cooper  219 

Sheldon  v.  Kibbe  295,  296 

v.  Leahy  175 

Shepard  v.  Mills  262 

Shepardson  v.  Stevens  262 

Sheppard  v.  Lang  32 

Sheppard  v.  Young  46 

Sheridan  v.  Carpenter  22 

Sherley  v.  Trabue  222 

Sherman  v.  Kitsmiller  64 

Sherred  v.  Cisco  49 

Shilling  v.  Templeton  262 

Shipley  v.  Smith  69 

Shirk  v.  Shultz  69 
Short  v.  Bullion-Beck,  etc.,  Co.  143 

v.  Stone  263 

Shreve  v.  Budd  204 

v.  Grimes  102 

Shriver  v.  Garrison  185 

Shropshire  v.  Adams  262 

Sibley  v.  County  of  Pine  32,  34 
Siebert  v.  Leonard  262,  264,  265,  268 
Siegel,  Cooper  &  Co.  c.  Eaton  & 

Prince  Co.  116 


TABLE    OF    CASES 


[References  are  to  Sections] 


Simmonds,  Ex  parte 
Simmons  v.  Bradley 

v.  Looney 
Simms  v.  Vick 
Simon  v.  Tipton 


41 

152 

15 

14,  15,  179 
46 


Simon's  Extrs.  v.  Walter's  Extrs.     34 
Simpson  v.  Bloss  143 

v.  Prudential  Ins.  Co.  69 

Simpson  Construction  Co.  v. 

Stenberg  175 

Sims  v.  Hutchins  98 

Sinclair  v.  Bowles  164,  175 

Single  v.  Schneider  190 

Sioux  City  Terminal,  etc.,  Co.  ». 

Trust  Co.  159 

Sipley  v.  Stickney  174,  175 

Sir  J.  J.  Ennis,  In  re  254 

Sires  v.  Clark  189 

Skeate  v.  Beale  212,  216 

Skiles's  Appeal  187 

Skillman's  Estate,  In  re  205 

Skinner  v.  Henderson  144 

Skyring  v.  Greenwood  29,  31 

Slade's  Case  2 

Slater  Woollen  Co.  v.  Lamb  160 

Slayton  v.  McDonald  262 

Sloan  v.  Gibbes  254 

Sloss  Iron  Co.  v.  Harvey  286 

Smallwood  v.  Sheppards  97 

Smart  ».  White  140 

Smethurst  ».  Woolston  262 

Smith  v.  Ayrault  256 

v.  Baker  298 

v.  Banker's  Union  of  Chicago     160 

v.  Blackley  148 

v.  Brady  175 

v.  Bromley  138,  140,  222 

v.  Bruning  151 

v.  Cooper  226 

v.  Cuff  141 

v.  Drake  187 

».  Hatch  101 

v.  Johnson  51 

v.  Keith  &  Perry  Coal  Co. 

262,  265,  268 

».  Kelly  27 

•D.  Mason  226 

v.  Mercer  80 

v.  Packard  175 

v.  Pritchett  97 

v.  Readfield  238 

v.  Richmond          135,  144,  148,  149 
».  Rodgers  101 

».  Rountree  248 

v.  Smith,  76  Ind.  185 


Smith  v.  Smith,  43  N.  H.         273,  277 
28  N.  J.  L.                         102,  107 
v.  Stewart  284 
v.  Treat                                  262,  263 
v.  Vernon  County  46 
v.  Williams  204 
v.  Zent  235 
Smith's  Committee  v.  Forsythe  202 
Smoot  v.  Smoot  108 
Smout  v.  Ilbery  77 
Smyley  v.  Reese  205 
Snow  v.  Alley  265 
Snowden  v.  Davis  219 
Snyder  v.  Murdock  128 
Society,  etc.,  v.  Wheeler  187 
Soderberg  ».  King  County  219 
Solinger  v.  Jewett  180 
Soper,  The  Charles  E.,  206 
South  Covington  Dist.  v.  Kan- 
ton  Water  Co.  161 
South  Texas  Telephone  Co.  c. 

Huntington  263 

Southall  v.  M'Keand  187 
Southern  Bldg.,  etc.,  Assn.  v.  Price  262 
Southern  Cotton  Oil  Co.  v.  Hen- 

shaw  187 

Southern  R.  Co.  v.  Brister  201 

v.  Mayor  of  Florence  238 
Southwick  v.  First  Nat.  Bank 

18,  19,  32 

Sowles  v.  Soule  238 

Spaids  v.  Barrett  216 

Sparks  v.  Purdy  280 

Spaulding  ».  Kendrick  279 

v.  Oakes  256 

Speake  v.  Richards  1 

Spear  v,  Gillet  73 

Spence  v.  Ham  175 
Spinney  v.  Hill  95,  104 

Spivey  v.  Morris  295 

Spokane  v.  Security  Sav.  Soc.  248 

Spooner  v,  Thompson  72 

Spring  Co.  v.  Knowlton  144 

Spun-  v.  Home  Ins.  Co.  298 

Squire  v.  Todd  262 

Staat  v.  Evans  277 

Stacy  v.  Foss  152 

Stahelin  v.  Sowle  263 

Stallings  v.  Ellis  51 

Stamper  v.  Temple  46 

Standard  Button,  etc.,  Co.  v.  Ellis  62 

Standish  v.  Ross  29 

Stanley  v.  Supervisors  of  Albany  237 
Stanley  Rule  &  Level  Co.  v. 

Bailey  15 


Hi 


TABLE    OF    CASES 


(References  are  to  Sections] 


Stanafield  v.  Kuntz  132,  140 

Stanton  v.  Willson's  Extra.  203 

Staples'  Appeal  205 
Star  Fire  Ins.  Co.  v.  N.  H.  Nat. 

Bank  80 

Stark  v.  Parker  166 

State  v.  Ewing  40 

v.  Nelson  241 

0.  Pullen  36 

v.  Young  40 

State  Bank  v.  Ensminger  222 

v.  First  Nat.  Bank  92 

v.  United  States  279 

Steamship  Co.  v.  Joliffe  1 

Steam  Stone  Cutter  Co.  v.  Shel- 

dons  288 

Stearns  v.  Dillingham  273,  283 

v.  Sims  287 

Steele  v.  Williams  219,  220 

Steeples  v.  Newton  174 

Steers,  Jr.,  The  Henry,  206 

Steinback  c.  Rhinelander  61 
Stephen    v.    Camden    &    Phila. 

Soap  Co.  262 

Stephens  v.  Board  of  Education     279 

v.  Dudbridge  Iron  works  Co.         69 

Stephenson  i>.  Mount  89 

Stetson  v.  Patten  73 

Stevens  v.  Fitch  232,  233 

v.  Head  15 

v.  Smith  250 

c.  Thompson  208 

Stevens'  Extra,  v.  Lee  95 

Stevenson  v.  Snow  61 

Stewart  v.  Ferguson  35 

v.  Loring  122 

v.  Thayer  153 

v.  Wright  141 

Stock  v.  Stoltz  51 

Stockett  v.  Watkins'  Admrs.  280,  284 

Stocks  v.  City  of  Sheboygan  32 

Stocksdale  v.  Schuyler  262 

Stokes  v.  Goodykoontz  185 

v.  Lewis  13,  56 

Stolle  v.  Stuart  122 

Stone  P.  Godfrey  38 

v.  Nichols  262 

».  Rodgers  262 

v.  Tyack  205 

v.  Waite  128 

Stonesifer  v.  Shiver  205 

Story  v.  Story  185 

Stothoff  v.  Dunham's  Extra.  254 

Stotsenburg  v.  Fordice  32,  179 

Stout,  In  re  253 


Stout  v.  Benoist  80,  83 
v.    Carruthersville    Hardware 

Co.  64 

Stout's  Admr.  v.  Royston  95,  104 

Stoval  v.  Borden  Grange  Bank        254 

Stover  v.  Cadwallader  97 

Stow,  Inhabitants  of,  v.  Sawyer     46 

Strain  v.  Wright  69 

Strange  v.  Franklin  22 

Street  v.  Blay  265 

Strickland  v.  Burns  277 

v.  Turner  60 

Strickter  v.  Guldin  262 

Stringfellow  v.  Curry  284 

Stroeh  v.  McClintock  175 

Strong  v.  Carver  Cotton  Gin  Co.     62 

Stroud  v.   Life  Ins.   Co.  281 

Stuart  v.  Sears  17,  179 

Stuhr  v.  Curran  287 

Sturges  v.  Allis  232 

Sturgis  v.  Preston  32,  33 

Sullivan  v.  Boley  262 

Summerall  v.  Graham  265 

Summit,    Poor    District  of,    v. 

Byera  204 

Sumpter  v.  Hedges  175 

Supervisors  v.  Manny  243 

Button  v.  Davis  128 

v.  Morris  256,  258 

v.  Rowley  104 

Swallow  v.  Emery  128 

Swan,  The  Mannie  206 

Swan  v.  Scott  143 

v.  Swan  208 

Swanzey  v.  Moore  98 

Swazey  v.  Choate  Mfg.  Co.  267 

Swift  v.  Swift  95 

Swift  Co.  v.  United  States  242 

Swires  v.  Parsons  46,  51 

Sykes  v.  Beadon  149 


Tacoma  v.  Bonnell  256 
Tague  v.  McColm  263 
Talamo  v.  Spitzmiller  97 
Talbot  v.  Nat.  Bank  of  Com- 
monwealth 34,  179 
Tallensen  v.  Gunderson  262 
Tankersley  v.  Childers  290 
Tanner  v.  Lee  279 
Tappenden  v.  Randall  135,  144 
Tarleton  v.  Baker  152 
Tarplee  v.  Capp  185 
Tate  v.  Pegues  148 


liii 


TABLE   OF   CASES 


[References  are  to  Sections] 


Taulbee  r>.  McCarty 
Taylor  v.  Bowers 

v.  Brewer 

r.  Caldwell 

v.  Chester 

v.  Hall 

t>.  Hare 

v.  Moore 

v.  Thieman 
Teakle  v.  Moore 
Teasdale  v.  Stoller 
Tenant  v.  Elliott 


116 
144 

65 
131 

135,  143 
219 

62 
152 

95,  103 
116 
236 
148 


Tennessee  Ice  Co.  v.  Rainc  160 

Terre  Haute,  etc.,  R.  Co.  v.  Mc- 

Murray  201 

Territory  v.  Newhall  40 

Terry  v.  Munger  273,  299 

Tew  v.  Jones  284 

Texas,  etc.,  R.  Co.  v.  Corr  256 

Theusen  v.  Bryan  266 

Third  Ave.  R.  Co.  v.  Klinker  232 

Third  Nat.  Bank  v.  Allen      80,  90,  92 

v.  Steel  66 

Thomas  v.  Brown  94,  98 

v.  City  of  Burlington  244 

v.  City  of  Richmond  135,  161 

v.  Ellis  175 

v.  Evans  187 

v.  Sowards  95,  99 

v.  Thomas'  Extr.  187 

v.  Thomasville  Shooting  Club    47 

v.  Watt  298 

Thompson  v.  Baird  226 

v.  Brouk  286 

r>.  City  of  Detroit  243 

v.  Dekum  254 

v.  Gaffey  262 

v.  Gould  128 

v.  Howard  285,  298 

v.  Murphy  75 

v.  Nelson  17 

t>.  Thompson  235 

v.  Williams  153 

Thompson   Brothers   r.    Cum- 

mings  135 
Thomson  v.  Town  of  Elton  161 
Thornhill  v.  O'Rear  153 
Thorson  v.  Hooper  185 
Thresher  v.  Stonington  Bank  262, 267 
Thurston  v.  Blanchard  278 
Thweatt  v.  Jones  256 
Ticonic  Bank  r>.  Smiley  251 
Tidewater  Quarry  Co.  c.  Scott  277 
Tiffany  &  Co.  v.  Johnson  &  Rob- 
inson 35 


Tilden  v.  Blair  224 

Tilton  t>.  Gordon  229 

Timberlake  r>.  Thayer  174 

Timmerman  c.  Stanley  265 

Title  Guarantee  and  Trust  Co. 

v.  Haven  84 

Tobias  v.  Rogers  253 

Todd  v.  Bettingen  95,  106 

v.  Leach  265 

v.  McLaughlin  265 

Toledo,  etc.,  R.  Co.  v.  Chew          273 
Tomkins  v.  Bernet  222 

Tongue  c.  Nutwell  187 

Toppan  v.  Atkinson  61 

Torpy  v.  Johnson  256 

Tourtelot  v.  Whithed  160 

Toussaint  v.  Martinnaut  253 

Towers  v.  Barrett  261,  262 

Towery  v.  McGraw  205 

Town  Council  of  Cahaba  r.  Bur- 
nett 35 
Townsend  v.  Crowdy                  15,  179 
0.  Hargraves                                      93 
v.  Sullivan                                        253 
Tozer  ».  Skagit  County                     240 
Tracy  v.  Talmage                       138,  140 
Tradesmen's  Nat.  Bank  v.  Third 

Nat.  Bank  88 

Travellers'  Ins.  Co.  v.  Heath  232 

Treat  v.  Craig  248 

Trecy  v.  Jefts  179 

Treece  v.  Treece  102,  107 

Trimble  v.  Bank  298 

Trimmer  v.  City  of  Rochester  230, 237 
Trinkle  v.  Reeves  262,  267 

Triplett  v.  Commonwealth  36 

Troewert  v.  Decker  153 

Troup's  Case  158 

Troy  v.  Bland  17 

Trustees  of  Cincinnati  Township 

t>.  Ogden  204 

Trustees  of  Dartmouth  College 
v.  International  Paper  Com- 
pany 190 
Trustees   of   the    University   v. 

Keller  229 

Tryon  v.  Baker  277 

Tucker  v.  Billing  262 

v.  Denton  18,  60 

v.  Grover  [First  Case]  108 

v.  Grover  [Second  Case]         34,  108 

v.  Mowery  153 

v.  Preston  52 

Tufts  r.  Wynne  &  Thompson       128 

Tugwell  v.  Heyman  205 


liv 


TABLE    OF   CASES 


[References  are  to  Sections] 


Turlington  v.  Slaughter  292 

Turner  v.  Barber  228 

v.  Davis  254 

v.  Debell  33 

v.  Robinson  174 

v.  Thompson  152 

v.  Turner  35 

v.  Webster  52 

Turner    Falls    Lumber    Co.    ». 

Burns  32,  179 

Tutt  v.  Ide  220 

Tuttle  v.  Campbell  273 

v.  Everett  238 

Tweedie  Trading  Co.  v.  James 

P.  McDonald  Co.  127,  129 

Tyler  v.  Bailey  90 

Tyson  v.  Doe  262 

U 

Ullman  v.  St.  Louis  Fair  Assn.       146 
Ulmer  v.  Farnsworth  49 

Union  Bank  v.  U.  S.  Bank  25 

Union  Bank  of  Lower  Canada 

v.  Ontario  Bank  25 

Union  Hall  Assn.  v.   Morrison 

187,  188,  189 

Union  Nat.  Bank  v.  Fraser  224 

Union  Pacific  R.  Co.  v.  Commrs. 

238,  244 

Union  Savings  Assn.  v.  Kehlor          15 
Union  Stock  Yards  Co.  v.  Chi- 
cago, etc.,  R.  Co.  256,  258 
United  States  v.  Addison  287 
v.  Bartlett  40 
v.  Behan                                           268 
v.  Clinton  Nat.  Bank                     31 
v.  Lawson                                         218 
v.  Molloy,  127  Fed.               262,  263 
144  Fed.                               176,  178 
v.  Nat.  Exch.  Bank                   80,  92 
v.  Northern  Pacific  R.  Co.            190 
v.  Pacific  R.  Co.                               49 
v.  Pinover                                          27 
United  States  Bank  v.  Bank  of 

GPO-T-'"  87 

v.  BauK.  of  Washington  232 

University,   Trustees  of  the,  v. 

Keller  229 

Urie  v.  Johnston  184 

Utica  Bank  v.  Van  Gieson  32 


Valente  v.  Weinberg  268 

Valle's  Heirs  v.  Fleming's  Heirs     187 


Valley  R.  Co.  v.  Lake  Erie  Iron 

Co.  134,  160 

Valpy  v.  Sanders  298 

Van  Beuren  v.  Wilson  121 

Van  Buren  v.  Reformed  Church  46,  50 
Vandegrift  v.  Vandegrift  149 

Vandergrif  11.  Swinney  226 

Van  Deusen  v.  Blum  73 

Vandiver  v.  Pollak  256 

Van  Dyke  v.  Hewitt  135 

Van  Pelt  v.  Schauble  152 

Van  Werden  v.  Equitable  Life 

Assur.  Co.  262,  265 

Van  Zandt  v.  Brantley  187 

Varney  v.  Monroe  Nat.  Bank  91 

Varnum  v.  Highgate  32 

Vaughn  v.  Vaughn  95,  108 

v.  Village  of  Port  Chester  239 

Veazie  v.  Penobscot  R.  Co.  258 

Venable  v.  Brown  98 

Vereycken  v.  Vandenbrooks  217,  228 
Vermeule  v.  York  Cliffs  Im- 
provement Co.  253 
Vermilyea  v.  Canniff  62 
Vick  v.  Shinn  215 
Vickery  v.  Ritchie  8 
Vicksburg,  City  of,  v.  Butler  242,  245 
Victoria,  etc.,  Society,  In  re  158 
Viles  v.  Barre,  etc.,  Power  Co.  176,  178 
Vinal  v.  Continental  Const.,  etc., 

Co.  43 

Vince,  In  re  64 

Volker  v.  Fisk  248 

Von  Carlowitz  v.  Bernstein  48 

Vyne  v.  Glenn  218 


W 

Wachovia  Nat.  Bank  v.  Ireland    227 

Wadsworth  v.  Sharpsteen  70 

Wainwright  v.  Straw  262 

Wait  v.  Maxwell  70 

Waite  v.  Leggett  15 

Wakefield  v.  Newbon  216 

t».  Van  Tassell  187 

Walan  ».  Kerby  140 

Walhier  v.  Weber  135 

Walker  v.  Ames  229 

v.  Bradley  33 

«.  Conant,  65  Mich.  25 

69  Mich.  22,  279 

v.  Hill  185 

v,  Laighton  203 

v.  Norfolk,  etc.,  R.  Co.  277 

v.  Orange  175 


Iv 


TABLE    OF   CASES 


[References  are  to  Sections] 


Walker  c.  Smith 

v.  Stetson 

p.  Taylor 

Walker's  Estate,  In  re 
Wallace  v.  Berdell 
Walsh  ».  Colclough 

v.  Fisher 

n.  Lennon 

».  Mayer 
Walsh  &  McKaig  v.  Chesapeake, 

etc.,  Canal  Co. 
Walters  v.  Miller 
Walton,   Witten   &   Graham   v. 

Miller's  Admx. 
Wanack  v.  Michels 
Ward  v.  Sugg 

v.  Town  of  Forest  Grove 

v.  Ward's  Heirs 
Ward  &  Co.  v.  Wallis 
Ware  v.  Percival 

t>.  Spinney 
Warner  v.  Cammack 

v.  Morrison 
Washington   Gas   Light   Co.    ». 

District    of    Columbia 
Wasserman  v.  Sloss 
Waters  ».  Register 
Watkins  v.  De  Armoiid     • 
Watson  v.  Cross 

v.  Cunningham 

v.  Duykink 

•».  Ledoux 

v.  Stever 
Watts  v.  Lynch 

c.  Ward 

Waugh  v.  Carriger 
Wave,  The 

Wayne  County  v.  Randall 
Weaver  v.  Aitcheson 

v.  Bently 
Webb  t).  Fulchire 

v.  Wilshire 
Weber  v.  Kirkendall 

».  Weber 

Weber  &  Co.  v.  Hearn 
Webster  c.  Enfield 

r.  Stewart 
Weeks  v.  Parsons 
Weill  v.  Foutanel 
Weis  v.  Delvin 
Weis  v.  Guerineau 
Weisser  v.  Denison 
Weitzel  v.  Leyson 
Welch  v.  Bagg 

T>.  Goodwin 

.- 


248 

49 

51 

48 

284 

-97 

122, 

125 

73 

226 

ke, 

298 

267 

v. 

256 

256 

224 

161 

208 

229 

298 

148 

281 

254 

V. 

258 

144, 

148 

205 

203 

202 

228 

129 

207 

273 

152 

207 

73 

206 

40 

262 

262, 

264 

141, 

152 

224 

215 

95 

56 

262, 

264 

187 

254 

266 

116 

248 

80 

265 

283 

90 

Welch  v.  Hicks  120 

Wellington  Nat.  Bank  v.  Robbins     80 

Wells  v.  Adams  217 

c.  Calnan  128 

p.  Porter  251 

Wellston,  City  of,  v.  Morgan  161 

Wellston  Coal  Co.   v.   Franklin 

Paper  Co.  262,  265,  268 

Welsh  v.  Gossler  263 

v.  Welsh  102 

Wendell  v.  Moulton  189 

Wenninger  v.  Mitchell  138,  151 

Wentick  v.  Board  of  Freeholders     161 

Weringer,  In  re  205 

Werner's  Appeal  202 

Werre  v.  Northwest  Thresher  Co.     72 

Wessel  v.  Johnston  Land  Co.  217 

West  v.  Bechtel  263 

v.  Holmes  152 

v.  Houston  15 

Westbrook  v.  Mize  297 

Westerfield  v.  Williams  187 

Western  v.  Creswick  235 

v.  Sharp  264,  268 

Western  Assurance  Co.  v.  Towle 

6,  281,  292 
Western    Maryland    R.    Co.    v. 

Blue  Ridge  Hotel  Co.  154 

Western  Ranches  v.  Custer  County  246 
Western  Union  Tel.  Co.  v.  Mayor  242 
Westlake  v.  City  of  St.  Louis  218 
Weston  v.  Davis  50 

v.  Luce  County  241 

West  Va.  Transp.  Co.  v.  Sweet- 

zer  220 

Wethersfield,  Town  of,  v.  Stan- 
ford 204 
Wharton  v.  Birmingham  237 
Wheadon  v.  Olds                          17,  179 
Wheatley  v.  Waldo                             228 
Wheaton  v.  Hibbard                          222 
Wheeler  v.  County  of  Plumas          238 
v.  Frankental  66 
t>.  Hatheway                                15,  17 
v.  Mather                                         177 
v.  Spencer                                         152 
Whelan  v.  Ansonia  Clock  Co.       119 
Whigham  v.  W.  Hall  &  Co.              128 
Whincup  v.  Hughes                            130 
Whipple  v.  Parker                              104 
Whitaker  v.  Burrows                   95,  101 
v.  Poston                                             294 
Whitcomb  v.  Harris  -                         217 
White  v.  Brooks                                  290 
v.  Continental  Nat.  Bank              80 


Ivi 


TABLE    OF   CASES 


[References  are  to  Sections] 


White  v.  Dotter  10 
».  Franklin  Bank    140, 144,  150,  156 

D.  Miller  180 

v.  Oliver  175,  178 

v.  Philbrick  295 

v.  Smith  246 

v.  Wieland  102 

v.  Wilson's  Admrs.  135 

v.  Yawkey  190 
White  River  School  Township  v. 

Dorrell  79 

Whitlock  v.  Auburn  Lumber  Co.     128 

Whitlock  Mach.  Co.  ».  Holway     216 

Whitney  v.  Port  Huron  239 

Whitt  v.  Blount  218 

Whitton,  The  Gas  Float  201 

Whitwell  v.  Carter  152 

Wiggin  v.  Wiggin  208 

Wiggins  v.  Bisso  149 

Wilde  v.  Baker  41 

Wilfong  v.  Johnson  262 

Wilhelm  ».  Defiance  258 

v.  Fimple  262 

Wilie  v.  Brooks  187 

Wilkerson  v.  Hood  216 

Wilkie  v.  Roosevelt  224 

o.  Womble  95 

Wilkinson  v.  Johnson  80,  89 

v.  Tousley  152 

Willet  v.  Willet  273 

William  Ede  Co.  v.  Heywood  248 

William,  etc.,  Works  v.  Atkinson    104 

Williams  v.  Allen  128 

v.  Bayley  214 

r>.  Bemis  95,  104 

x.  Hathaway  180 

».  Hedley  140 

v.  Morris  101 

0.  Phelps  216 

'    n.  Sapielia  70 

v.  Simmons  233 

v.  Smith  281 

v.  Stewart  238 

v.  Vanderbilt  187 

v.  West  Chicago,  etc.,  R.  Co.        46 

p.  Wilder  224 

v.  Williams  51 

Williams'  Estate,  In  re  95,  103 

Williamsburg  Trust  Co.  v.   Turn 

Suden  92 

Williamson  v.  Cole  217 

».  Jones  187 

Willson  v.  Owen  148,  149 

Wilson  v.  Alexander  85,  90 

v.  Barker  25 


Wilson  v.  Burks  265 
v.  Cameron  229 
v.  Clark  128 
v.  Mullins  68 
v.  Pelton  238 
v.  Randall  180 
v.  Selbie  222,  226 
v.  Strugnell  144 
Wilt  v.  Town  of  Redkey  148 
Winchester  v.  Craig  190 
Windbiel  v.  Carroll  13 
Wing  v.  Dunn  224 
Wingerter  v.  City  of  San  Francisco    35 
Winn  v.  Morris  262 
v.  Southgate  174 
Winstead  v.  Reid  175 
Winston  v.  Nunez  232 
Winters  v.  Elliott  108 
Winthrop's  Admrs.  o.  Hunting- 
ton  187 
Wisconsin,  etc.,  R.  Co.  v.  United 

States  40 

Wise  v.  Rose  152 

Wisner  v.  Buckley  231 

Witherow  v.  Witherow  176 

Wojahn  v.  Nat.  Union  Bank  50 

Wolcott  v.  Frick  180 

Wolf  v.  Beaird  185 

v.  Burke  66 

v.  Gerr  175 

Wolf  v.  Schlacks  263 

Wolfe  v.  Howes  122,  123,  125 

Wolmershausen  v.  Gullick  254 

Wonsettler  ».  Lee  95 

Wood  v.  Cuthberaon  222,  226 

v.  Lake  222 

v.  Leland  254 

v.  Mason  262 

v.  Mystic  Circle  160 

v.  Sheldon  60 

v.  Wood  152 

Woodberry  v.  Warner  263 

Woodbury  v.  Gardner  102 

v.  Woodbury  284 

Wooden-Ware    Co.     v.     United 

States  190 

Woodford  v.  Kelly  175 

Woodham  v.  Allen  141 
Woodmere    Cemetery    Assn.    v. 

Township  238 

Woodruff  v.  D.  Zaban  &  Son      273 

Woodward  v.  Cowing  127 

v.  McCollum  128 

Woodworth  v.  Bennett  143,  149 

v,  Huntoon  224 


Ivii 


TABLE   OF   CASES 


[References  are  to  Sections] 


Wooley  ».  Batte  256 

Woolfolk  v.  Bird  222,  226 

Wooten  r>.  Reed  175 

World  Pub.  Co.  v.  Hull  267 
World's   Columbian  Exposition 

t.  Liesegang  174 

Worley  t>.  Moore,  77  Ind.  32 

97  Ind.  179 

v.  Nethercott  262 

Wortendyke  v.  Meehan  224 

Worth  v.  Stewart  17 

Worthington  v.  Plymouth,  etc., 

R.  Co.  50 

Wrayton  v.  Naylor  262 

Wrexham,  etc.,  R.  Co.  In  re  158 

Wright  v.  Aldrich  234 

v.  Haskell  262,  263 

v.  Lathrop  295 

v.  The  Pipe  Line  Co.  160 

v.  Smith  177 

v.  Stewart  141,  144 

W.  W.  Cook  and  Son  v.  City  of 

Cameron  161 

Wyckoff  v.  Curtis  33 

Wyley  v.  Bull  51 

Wyman  v.  Passmore  64 

Wynne  v.  Latham  280 


Yale  r>.  Coddington  262 

Yarborough  v.  Wise  27 


Yates  v.  Bachley  102 

v.  Foot  152 

v.  Royal  Ins.  Co.  242,  244 

Yatesville  Banking  Co.  v.  Fourth 


Nat.  Bank 
Yeats  v.  Ballentine 
York  v.  Farmers'  Bank 

v.  Washburn 
Youmans  v.  Edgerton 
Young  v.  Adams 
Young  v.  City  of  Chicopee 

v.  Cole 

v.  Farwell 

c.  Lehman 

v.  Shunk 

t).  Stevens 
Younge  v.  Toynbee 
Yturburru,  Estate  of 


92 

175,  178 
279,  293 
98 
18 
60 
116 
60 
64 

80,  85,  90,  91 
254 
70 
77 
202 


Zeigler  v.  Maner  224 

Zephyrus,  The  206 

Zink  v.  Wells,  Fargo  &  Co.  279 

Zottman  v.  San  Francisco  66,  161 

Zwietusch  v.  Watkins  187 


Iviil 


TREATISES  AND  ARTICLES  CITED 

Abbott.  Charles,  "A  Treatise  of  the  Law  relative  to  Merchant  Ships  and  Sea- 
men."    14th  edition,  London,  1901. 
Abbott,   Howard  S.,   "A  Treatise  on  the  Law  of  Municipal  Corporations." 

St.  Paul,  1905. 
"American  and  English  Encyclopedia  of  Law,"  Edited  by  David  S.  Garland 

and  Lucius  P.  McGehee  under  the  supervision  of  James  Cockcroft,  2d 

edition,  Northport,  Long  Island,  N.Y.,  1896-1905. 
Ames,  James  Barr,   "Assuinpsit  for  Use  and  Occupation."  2  Harvard  Law 

Review,  377. 
"  The  Disseisin  of  Chattels."     3  Harvard  Law  Review  23,  313,  337.     3  Ea- 

says  in  Anglo-American  Legal  History,  541. 

"The  Doctrine  of  Price  v.  Neal."     4  Harvard  Law  Review,  297. 

"The  History  of  Assumpsit."     2  Harvard  Law  Review,  1,  53.     3  Essays  in 

Anglo-American   Legal   History,    259. 
Anson,   Sir  William  R.,   "Principles  of  the  English  Law  of  Contract."     2d 

American  copyright  edition  by  E.  W.  Huff  cut,  N.  Y.,  1906. 
Austin,  John,  "Lectures  on  Jurisprudence."     3d  edition,  London,  1869. 

Beale,  Joseph  H.,  "The  Measure  of  Recovery  upon  Implied  and  Quasi  Con- 
tracts." 19  Yale  Law  Journal,  609. 

Bigelow,  Melville  M.,  "Mistake  of  Law  as  a  Ground  of  Equitable  Relief." 
1  Law  Quarterly  Review,  298. 

Bishop,  Joel  Prentiss.  "Commentaries  on  the  Law  of  Contracts."  Chicago, 
1887. 

Browne,  Causten,  "A  Treatise  on  the  Construction  of  the  Statute  of  Frauds.1' 
5th  Edition,  Boston,  1895. 

Coke,  Edward,  "The  First  Part  of  the  Institutes  of  the  Laws  of  England; 

or  a  Commentary  upon  Littleton."     London,  1832. 
Cooley,  Thomas  M.,   "A  Treatise  on  the  Constitutional  Limitations."     7th 

edition,  Boston,  1903. 

"A  Treatise  on  the  Law  of  Torts."     3d  edition,  Chicago,   1906. 

Corbin,  Arthur  L.,  "Waiver  of  Tort  and  Suit  in  Assumpsit."     19  Yale  Law 

Journal,  221. 
Costigan,  George  P.,  Jr.,  "Change  of  Position  as  a  Defense  in  Quasi-Contracts  — 

The   Relation   of   Implied   Warranty  and   Agency   to   Quasi-Contracts.'' 

20  Harvard  Law  Review,  205. 

"Conditions  in  Contracts."     7  Columbia  Law  Review,  151. 

"The  Doctrine  of  Boston  Ice  Company  v.  Potter."     7  Columbia  Law 

Review,  32. 

"Cyclopedia  of  Law  and  Procedure."  Edited  by  William  Mack  and  Howard 
P.  Nash.  N.  Y.,  1901-1912. 

lix 


LIST   OF   TREATISES   AND   ARTICLES   CITED 

Daniel,  John  W.,  "A  Treatise  on  the  Law  of  Negotiable  Instruments."  5th 
edition,  N.  Y.,  1903. 

Eversley,  William  Finder,  "The  Law  of  the  Domestic  Relations."  3d  edition, 
London,  1906. 

Griffith,  Walter  Hussey,  "Election  between  Alternative  Remedies."  16  Law 
Quarterly  Review,  160. 

Harriman,  Edward  Avery,  "The  Law  of  Contracts."     2d  edition,  Boston,  1901. 

"  Ultra  Vires  Corporation  Leases."     14  Harvard  Law  Review,  332. 

Huffcut,  Ernest  Wilson,  "The  Law  of  Agency."     2d  edition,  Boston,  1901. 
Hutchinson,  Robert.  "A  Treatise  on  the  Law  of  Carriers."     3d  edition,  Chicago, 
1906. 

Keener,  William  Albert,  "  A  Treatise  on  the  Law  of  Quasi-Contracts."  N.  Y., 
1893. 

Knowlton,  Jerome  C.,  "The  Quasi-Contractual  Obligation  of  Municipal  Cor- 
porations." 9  Michigan  Law  Review,  671. 

Langdell,   Christopher  Columbus,   "A  Summary  of  the  Law  of  Contracts." 

2d  edition,  Boston,  1880. 

Lightwood,  John  M.,  "The  Time  Limit  on  Actions."      London,  1909. 
Lindley,  Nathaniel,  "A  Treatise  on  the  Law  of  Partnership."     7th  edition, 

London,  1905. 

Machen,  Arthur  W.f  Jr.,  "A  Treatise  on  the  Modern  Law  of  Corporations." 

Boston,  1908. 
McQuillan,  Eugene,  "Action  of  Use  and  Occupation  against  a  Trespasser." 

23  Central  Law  Journal,  387. 

Maine,  Henry  Sumner,  "Ancient  Law."     3d  American  edition,  New  York. 
Mechem,  Floyd  R.,  "The  Law  of  Public  Officers."     Chicago,  1890. 

"A  Treatise  on  the  Law  of  Agency."     Chicago,  1889. 

Morawetz,  Victor,   "A  Treatise  on  the  Law  of  Private   Corporations."     2d 

editio'n,  Boston,  1886. 
Morse,  John  T.,  "A  Treatise  on  the  Law  of  Banks  and  Banking."     3d  edition, 

Boston,  1888. 

Norton,  Charles  Phelps,   "Handbook  of  the  Law  of  Bills  and   Notes."     3d 

edition,   St.  Paul,   1900. 
Nouguier,  "Lettre  de  Change."     4th  edition. 

Pardessus,  Jean  Marie,  "Cours  de  Droit  Commercial."  3d  edition,  Paris, 
1826. 

Parsons,  Theophilus,  "The  Law  of  Contracts."     9th  edition,  Boston,  1904. 

"Law  of  Promissory  Notes  and  Bills  of  Exchange."  2d  edition,  Phila- 
delphia, 1876. 

"A  Treatise  on  the  Law  of  Partnership."     4th  edition,  Boston,  1893. 

Pepper,  George  Wharton,  "The  Unauthorized  or  Prohibited  Exercise  of  Cor- 
porate Power."  9  Harvard  Law  Review,  255. 

Pollock,  Sir  Frederick,  "Principles  of  Contract  at  Law  and  in  Equity."  3d 
American  from  7th  English  edition,  by  S.  Williston,  N.  Y.,  1906. 

"Divisions  of  Law."     8  Harvard  Law  Review,  188. 

and  Maitland,  Frederick  William,  "History  of  English  Law  before  the 

Time  of  Edward  I."  2d  edition,  London,  1899. 

Ix 


LIST   OF  TREATISES   AND   ARTICLES   CITED 

Pomeroy,  John  Norton,  "A  Treatise  on  Equity  Jurisprudence."     3d  edition, 

San    Francisco,    1905. 
"A  Treatise   on   the   Specific   Performance   of  Contracts."     2d   edition, 

N.  Y.,  1897. 
Pothier,  R.  J.,   "Treatise  on  Obligations."     Translated  from  the  French  by 

W.  D.  Evans,  2d  American  edition,  Philadelphia,  1839. 

Rawle,  William  Henry.  "A  Practical  Treatise  on  the  Law  of  Covenants  for 
Title."  5th  edition,  Boston,  1887. 

Heath,  Theodore  W.,  "Contribution  between  Persons  jointly  charged  for  Neg- 
ligence—  Merryweather  v.  Nixan."  12  Harvard  Law  Review,  176. 

Robinson,  William  C.,  "Law  of  Patents  for  Useful  Inventions."     Boston,  1890. 

Saint-German,  Christopher,  "Doctor  and  Student."     18th  edition,  revised  by 

William  Muchall,  Cincinnati,  1886. 

Scott,  James  Brown,  "Cases  on  Quasi-Contracts."     New  York,  1905. 
Sedgwick,  Theodore,  "A  Treatise  on  the  Measure  of  Damages."     8th  edition, 

N.  Y.  1891. 
Selwyn,  William,  "An  Abridgment  of  the  Law  of  Nisi  Prius."     13th  edition, 

London,  1869. 

Stadden,  Corry  Montague,  "Error  of  Law."     7  Columbia  Law  Review,  476. 
Story,    Joseph,    "Commentaries    on    Equity    Jurisprudence."     13th    edition, 

Boston,  1886. 
Sutherland,  J.  G.,  "A  Treatise  on  the  Law  of  Damages."     2d  edition,  Chicago, 

1893. 

Tiffany,  Walter  C.,  "Handbook  of  the  Law  of  Persons  and  Domestic  Relations." 
2d  edition,  St.  Paul,  1909. 

Wachter,  Oskar,  "Das  Wechselrecht  des  Deutschen  Reiches."  Stuttgart, 
1883. 

Wigmore,  John  H.,  "A  Summary  of  Quasi-Contracts."  25  American  Law 
Review,  695. 

— —  "A  Treatise  on  the  System  of  Evidence,"  Boston,  1904. 

"The  Tripartite  Division  of  Torts."     8  Harvard  Law  Review,  200. 

Williams,  Sir  Roland  L.  Vaughan,  "A  Treatise  on  the  Law  of  Executors  and 
Administrators."  7th  American  edition,  Jersey  City,  1895. 

Williston,  Samuel,  "Dependency  of  Mutual  Promises  in  the  Civil  Law."  13 
Harvard  Law  Review,  80. 

"The  Law  governing  Sales  of  Goods."     N.  Y.,  1909. 

"The  Risk  of  Loss  after  an  Executory  Contract  of  Sale  in  the  Common 

Law."  9  Harvard  Law  Review,  106. 

Windschied,  Bernhard,  "Lehrbuch  des  Pandektenrechts."  9th  edition,  Frank- 
fort am  Main,  1906. 

Woodward,  Frederic  C.,  "Assignability  of  Contracts."  18  Harvard  Law- 
Review,  23. 


1x1 


THE  LAW   OF 
QUASI   CONTRACTS 


CHAPTER    I 

INTRODUCTION:   ORIGIN  AND  NATURE  OF  QUASI  CONTRACTS 

§  I.     (I)  Scope  of  the  subject. 

§  2.     (II)  Origin  of  quasi  contracts. 

§  3.     (Ill)  Nature  of  quasi  contracts: 
(1)  Chief  characteristics. 

§  4.         (2)  Quasi  contracts  distinguished  from  contracts. 

§  5.         (3)  Quasi  contracts  distinguished  from  the  duty  not  to  com- 
mit a  tort. 

§  6.         (4)  Quasi  contracts  distinguished  from  equitable  obligations. 

§  7.     (IV)  Essential  elements  of  quasi  contractual  obligation. 

§  8.          (1)  Receipt  of  a  benefit. 

§  9,         (2)  Retention  of  benefit  inequitable :   Classification  of  quasi 
contracts. 

§  1.  (I)  Scope  of  the  subject.  —  Since  the  field  of  quasi 
contracts  is  not  one  of  settled  and  precise  limits,  it  is  necessary, 
at  the  outset,  to  indicate  just  what  part  of  the  law  of  obligation 
this  treatise  is  intended  to  cover.  The  term  "  quasi  contracts  " 
may  with  propriety  be  applied  to  all  noncontractual  obligations 
which  are  treated,  for  the  purpose  of  affording  a  remedy,  as  if 
they  were  contracts.  So  interpreted,  the  subject  includes :  (1) 
judgments  and  other  so-called  contracts  of  record ;  (2)  a  num- 
ber of  official  and  statutory  obligations,  such  as  the  official 
obligation  of  a  sheriff  to  levy  execution  and  pay  over  the  pro- 
ceeds, and  the  statutory  obligation  of  the  owner  of  a  vessel 
to  pay  pilotage ; l  and  (3)  obligations  arising  from  "  unjust 

1  See  Speake  v.  Richards,  Hob.  206 ;  Steamship  Co.  v.  Joliffe,  1864, 
2  Wall.  (U.  S.)  450.  Professor  Ames,  whose  example  was  followed  by 
Professor  Keener,  included  in  this  second  class  a  number  of  customary 
obligations,  such  as  that  of  the  innkeeper  and  that  of  the  carrier,  which 
are  not  enforced,  ordinarily,  by  means  of  contractual  forms  of  action, 

1 


§  1]  INTRODUCTION 

enrichment,"  i.e.  the  receipt  by  one  person  from  another  of 
a  benefit  the  retention  of  which  is  unjust.  But  in  view  of  the 
fact  that  nearly  all  of  the  obligations  included  in  the  first  two 
classes  are  commonly  known  and  treated  under  more  specific 
designations,  or  as  parts  of  other  clearly  defined  topics,  while 
those  of  the  third  class  have  no  other  distinct  ve  name  whatever, 
it  is  believed  that  the  term  "quasi  contracts,"  for  the  sake  of 
convenience,  should  ordinarily  be  applied  to  obligations  of  the 
third  class  alone.  For  this  reason,  and  for  the  further  reason 
that  they  constitute  a  homogeneous  group,  essentially  different 
from  all  others,  this  book  will  treat  solely  of  obligations  arising 
upon  the  receipt  of  a  benefit  the  retention  of  which  is  unjust. 

§  2.  (II)  Origin  of  quasi  contracts.  —  Although  there  are 
earlier  cases  in  which  obligations  which  would  now  be  rec- 
ognized as  quasi  contractual  were  enforced,  Lord  MANSFIELD'S 
opinion  in  the  case  of  Moses  v.  Macferlan,1  decided  by  the  Court 
of  King's  Bench  in  1760,  may  be  said  to  mark  the  emergence  of 
quasi  contract  as  a  distinct  species  of  common  law  obligation. 
Some  knowledge  of  the  actions  of  debt  and  assumpsit  is  essential 
to  an  understanding  of  that  opinion.  Debt  was  a  form  of  action 
that  lay  to  recover  a  definite  sum  due  by  a  record  or  a  contract 
under  seal  or  as  the  price  of  some  thing  or  service ;  assumpsit, 
an  action  of  later  origin,  lay  to  recover  damages  for  the  breach 
of  such  simple  contracts  as  were  not  reached  by  the  action  of 
debt.  In  order  to  avoid  the  possibility  of  defense  by  wager  of 
law,2  which  was  allowed  in  debt,  attempts  were  made  to  use 

but  which  superficially  resemble  most  contracts  and  differ  from  the  duty 
not  to  commit  a  tort,  in  that  they  require  the  obligor  to  act  rather  than 
to  forbear.  See  Ames,  "History  of  Assumpsit,"  2  Harv.  Law  Rev.  53, 
64 ;  Select  Essays  in  Anglo-American  Legal  History,  Vol.  Ill,  259,  292  ; 
Keener,  "Quasi-Contracts,"  p.  18.  For  a  discussion  of  the  distinction 
between  quasi  contracts  and  the  duty  not  to  commit  a  tort,  see,  post,  §  5. 

1  2  Burr.  1005. 

2  Wager  of  law  was  a  method  of  trial.     The  oath  of  the  defendant 
that  he  did  not  owe  the  debt,  fortified  by  the  oaths  of  a  number  (usu- 
ally eleven)  of  his  kinsmen  and  neighbors,  called  oath  helpers  or  com- 
purgators,  that  his  oath  was  true,  constituted  a  defense  to  the  action. 
See  Pollock  and  Maitland,  "History  of  English  Law,"  Vol.  II,  600.  634. 
There  is  a  reported  instance  of  its  use  as  late  as  1824  (King  v.  Williams, 

2 


Chap.  I]  ORIGIN   OF   QUASI   CONTRACTS  [§  2 

the  action  of  assumpsit  in  cases  of  simple  contract  to  which 
debt  applied.  Eventually,  by  a  process  consisting  of  two  dis- 
tinct stages,  this  extension  of  assumpsit  was  accomplished. 
First,  it  was  h.^ld  that  a  preexisting  debt  constituted  a  considera- 
tion for  a  promise,  and  therefore,  if  one  who  was  already  under 
an  obligation  enforceable  by  an  action  of  debt  made  a  promise 
to  pay  the  debt,  such  promise  was  enforceable  by  an  action  of 
assumpsit.1  Then,  it  was  declared  that  a  promise  to  pay  a  debt 
would  be  implied  and  it  was  therefore  unnecessary  to  prove  an 
express  promise.2  Indebitatus  assumpsit,  as  it  was  called, 
thus  became  a  concurrent  remedy  in  cases  of  debt  upon  a  simple 
contract.  This  was  the  situation  when  Moses  v.  Macferlan3 
arose.  In  that  case,  Moses  had  indorsed  notes  of  one  Jacob 
to  Macferlan  upon  the  latter's  agreement  that  no  suit  should 
be  brought  against  Moses  on  the  notes.  In  violation  of  his 
agreement  Macferlan  had  sued  Moses  upon  his  indorsements 
in  the  Court  of  Conscience4  and  had  obtained  a  judgment, 
the  court  taking  the  view  that  it  had  no  jurisdiction  over  the 
collateral  agreement  not  to  sue  which  Moses  had  set  up  as  a 
defense.  Moses  paid  the  judgment  and  then  brought  indebita- 
tus  assumpsit  in  the  King's  Bench  to  recover  the  money  so 
paid.  For  the  defendant,  it  was  objected  that  since  the  case 
was  neither  one  of  a  genuine  promise  by  the  defendant  nor  one 
to  which  the  action  of  debt  applied,  the  action  of  assumpsit 
would  not  lie.  But  Lord  MANSFIELD,  desirous  of  extending  still 
further  the  scope  of  that  simple  and  advantageous  remedy,  and 
finding  his  justification  in  the  principles  of  the  Roman  law,5 
declared  that  the  objection  was  without  merit,  saying : 6 

2  Barn.  &  Cr.  538)  and  it  was  not  formally  abolished  until  1833.  See 
73  Statutes  at  Large  (3  &  4  Will.  IV)  c.  42,  §  13.  In  America  the  prac- 
tice never  obtained  a  foothold.  See  Childress  v.  Emory,  1823,  8  Wheat. 
(U.  S.)  642,  675. 

1  See  Manwood  v.  Bruston,  1588,  2  Leo.  203,  204. 

1  Slade's  Case,  1602,  4  Coke,  92  b. 

3  1760,  2  Burr.  1005. 

4  An  inferior  court  for  the  collection  of  small  debts. 

5  See  Appendix    by  Sir  W.  D.  Evans    to  Pothier,    "Obligations" 
(1806),  Vol.  II,  321-324 ;   Scott, '.'  Cases  on  Quasi-Contracts,"  pp.  9-16. 

6  At  page  1008. 

3 


§  3]  INTRODUCTION 

"If  the  defendant  be  under  an  obligation,  from  the  ties  of 
natural  justice,  to  refund,  the  law  implies  a  debt,  and  gives 
this  action,  founded  in  the  equity  of  the  plaintiff's  case,  as  it 
were  upon  a  contract  ('quasi  ex  contractu,'  as  the  Roman  law 
expresses  it).  .  .  .  This  kind  of  equitable  action,  to  recover 
back  money,  which  ought  not  in  justice  to  be  kept,  is  very 
beneficial,  and  therefore  much  encouraged.  It  lies  only  for 
money  which,  ex  csquo  et  bono,  the  defendant  ought  to  refund : 
it  does  not  lie  for  money  paid  by  the  plaintiff,  which  is  claimed 
of  him  as  payable  in  point  of  honor  and  honesty,  although  it 
could  not  have  been  recovered  from  him  by  any  course  of  law,  — 
as  in  payment  of  a  debt  barred  by  the  statute  of  limitations,  or 
contracted  during  his  infancy,  or  to  the  extent  of  principal  and 
legal  interest  upon  a  usurious  contract,  or,  for  money  fairly 
lost  at  play;  because  in  all  these  cases  the  defendant  may  re- 
tain it  with  a  safe  conscience,  though  by  positive  law  he  was 
barred  from  recovering.  But  it  lies  for  money  paid  by  mistake ; 
or  upon  a  consideration  which  happens  to  fail;  or  for  money 
got  through  imposition,  (express  or  implied) ;  or  extortion ; 
or  oppression ;  or  an  undue  advantage  taken  of  the  plaintiff's 
situation,  contrary  to  laws  made  for  the  protection  of  persons 
under  those  circumstances.  In  one  word,  the  gist  of  this  kind 
of  action  is,  that  the  defendant,  upon  the  circumstances  of  the 
case,  is  obliged  by  the  ties  of  natural  justice  and  equity  to  re- 
fund the  money." 

Thus,  by  the  device  of  a  fictional  promise,  the  door  was 
opened  to  the  enforcement  of  those  obligations,  previously 
unrecognized  by  the  common  law,  which  are  now  known  as 
quasi  contracts. 

§  3.  (Ill)  Nature  of  quasi  contracts :  (1)  Chief  characteris- 
tics. —  The  general  nature  of  quasi  contractual  obligations  is 
revealed  by  the  foregoing  sketch  of  their  origin.  They  may 
be  defined  as  legal  obligations  arising,  without  reference  to  the 
assent  of  the  obligor,  from  the  receipt  of  a  benefit  the  retention  of 
which  is  unjust,  and  requiring  the  obligor  to  make  restitution.1 
Their  chief  distinguishing  characteristics  are  as  follows : 

1  For  an  excellent  discussion  of  the  nature  of  quasi  contracts,  see 
Professor  Corbin's  article  on  "  Quasi-Contractual  Obligations,"  21 

4 


Chap.  I]        NATURE  OF  QUASI  CONTRACTS  [§  3 

1.  They    are    paramount    or    irrecusable,    as    distinguished 
from    consensual   or  recusable,    obligations.1     That    is,    they 
are   imposed  by  law  without  reference  to  the  assent  of  the 
obligor. 

2.  They  are    particular,    as    distinguished  from    universal, 
obligations.     That  is,  they  are  imposed  because  of  a  special 
state  of  facts  and  in  favor  of  a  particular  person,  and  do  not 
rest  upon  one  at  all  times  and  in  favor  of  all  persons. 

3.  They  are  based  upon  equitable  considerations,  but  had 
their  origin  in  the  courts  of  law  and  are  enforced  by  so-called 
legal  remedies. 

4.  They  require  that  the  obligee  shall  be  compensated,  not 
for  any  loss  or  damage  suffered  by  him,  but  for  the  benefit  which 
he  has  conferred  upon  the  obligor. 

The  first,  second,  and  third  characteristics  serve,  as  will  be 
seen  in  the  following  sections,  to  distinguish  quasi  contracts 
from  contractual  obligations,  from  the  general  obligation  not 
to  commit  a  tort,  and  from  equitable  obligations  proper,  re- 
spectively. The  fourth  characteristic  governs  the  measure  of 
recovery.  This  will  be  treated  specifically  in  connection  with 
various  classes  of  quasi  contracts  hereafter  to  be  considered. 
In  this  chapter  it  is  only  necessary  to  say  that  while  in  many 
cases  of  the  receipt  of  property  there  is  doubtless  a  moral 
obligation  to  make  restitution  in  specie,  and  while  equity 
frequently  compels  restitution  in  specie,  the  only  obligation 
recognized  and  enforced  at  law  is  the  obligation  to  make  resti- 
tution in  value,  i.e.  to  pay  the  equivalent  or  the  reasonable 
worth  of  the  benefit  received.2  This  obligation,  for  the  sake 

Yale  Law  Jour.  533.  Treating  judgments  and  certain  statutory, 
official,  and  customary  obligations  as  within  the  field,  he  defines  a 
quasi  contract  to  be  "a  legal  obligation,  not  based  upon  agreement, 
enforced  either  specifically  or  by  compelling  the  obligor  to  restore  the 
value  of  that  by  which  he  was  unjustly  enriched." 

1  For  the  classification  of  obligations  as  recusable  and  irrecusable 
and  the  division  of  irrecusable  obligations  into  particular  and  universal, 
see  Professor  Wigmore's  article,  "The  Tripartite  Division  of  Torts,'' 
8  Harv.  Law  Rev.  200,  201. 

2  As  to  the  primary  obligation  of  one  in  default  under  a  contract 
within  the  Statue  of  Frauds,  see  post,  §  96. 

5 


§  4]  INTRODUCTION 

of  convenient  brevity  and  in  order  to  distinguish  it  from  the 
secondary  obligation  of  the  contractor  or  tort-feasor  to  com- 
pensate the  injured  party  for  the  damages  suffered  by  him,  will 
hereafter  be  called  the  obligation  to  make  restitution. 

§  4.  (2)  Quasi  contracts  distinguished  from  contracts.  - 
Only  within  the  last  generation  have  quasi  contractual  obliga- 
tions been  commonly  so  called.  They  were  formerly  regarded 
as  a  species  of  contract,  and  to  distinguish  them  from  express 
contracts  and  contracts  implied  in  fact,  i.e.  contracts  in  which 
a  promise  is  inferred  from  conduct,  were  called  contracts  im- 
plied in  law.  Since,  like  contracts  proper,  they  were  enforced 
by  means  of  the  action  of  assumpsit,  it  is  not  surprising  that  in 
a  period  when  more  importance  was  attached  to  the  forms  of 
legal  remedies  than  to  the  nature  of  substantive  rights,  the 
essential  dissimilarity  of  the  two  obligations  was  not  observed. 
The  persistent  failure  to  recognize  it,  however,  has  resulted  in 
confusion  and  error,  and  in  many  cases  has  wrought  serious 
injustice.  It  cannot  be  too  strongly  emphasized,  therefore, 
that  quasi  contracts  are  in  no  sense  genuine  contracts.  The 
contractor's  obligation  is  one  that  he  has  voluntarily  assumed. 
He  is  bound  because  he  has  made  a  promise  or  undertaking 
that  the  law  will  enforce.  And  the  only  difference  between  an  ex- 
press contract  and  a  contract  implied  in  fact  is  that  in  the 
former  the  promise  or  undertaking  is  verbal,  while  in  the  latter  it 
is  an  implication  of  the  promisor's  conduct.  But  quasi  con- 
tractual obligations  are  imposed  without  reference  to  the  obligor's 
assent.  He  is  bound,  not  because  he  has  promised  to  make 
restitution — it  may  be  that  he  has  explicitly  refused  to  promise, 
-  but  because  he  has  received  a  benefit  the  retention  of  which 
would  be  inequitable. 

In  view  of  this  generic  difference  between  contractual  and 
quasi  contractual  obligations  the  use  of  the  term  "  contracts 
implied  in  law  "  to  describe  the  latter  is  particularly  misleading. 
This  was  recognized  by  Sir  Frederick  Pollock  and  Sir  William 
Anson,  who  adopted  from  the  Roman  law  and  from  works  on 
the  science  of  jurisprudence  the  term  "  quasi  contracts," 
denoting  obligations  bearing  "  a  strong  superficial  analogy  or 

6 


Chap.  I]        NATURE  OF  QUASI  CONTRACTS  [§  5 

resemblance  "  l  to  contracts,  but  essentially  different  therefrom. 
Other  writers  have  suggested  the  term  "constructive  contracts," 
i.e.  fictional  contracts  imagined  or  constructed  by  the  courts 
for  the  purpose  of  affording  a  remedy.2  Neither  of  these  desig- 
nations is  as  happy  as  would  be  one  that  avoided  altogether 
the  use  of  the  word  "  contracts,"  but  they  are  less  objectionable 
than  the  term  "  contracts  implied  in  law."  The  former  of 
them  —  "  quasi  contracts  "  —  has  recently  come  into  general 
use.3 

§  5.  (3)  Quasi  contracts  distinguished  from  the  duty  not  to 
commit  a  tort.  —  Quasi  contractual  obligations  and  the  obli- 
gation or  duty  a  breach  of  which  constitutes  a  tort 4  are  alike 
paramount,  or  irrecusable.  That  is,  unlike  contractual  obli- 
gations, they  are  imposed  without  reference  to  the  obligor's 
assent.  As  accounting  for  the  fact  that  notwithstanding  this 
similarity  the  courts  adapted  to  this  class  of  obligations  con- 
tractual rather  than  tort  remedies,  it  has  been  pointed  out  that 

1  Maine,  "Ancient  Law  "  (3d  Am.  ed.),  P-  332. 

2  See  opinion  of  LOWRIE,  J.,  in  Hertzog  v.  Hertzog,  1857,  29  Pa.  St. 
465,  468,  in  which  he  distinguishes  constructive  contracts  from  genuine 
implied  contracts  and  defines  the  former  as  "fictions  of  law  adapted  to 
enforce  legal  duties  by  actions  of  contract,  where  no  proper  contract 
exists,   express   or  implied."     See  also   Professor   Knowl ton's   article 
on  the  "  Quasi  Contractual  Obligation  of    Municipal   Corporations," 
9  Mich.  Law  Rev.  671,  in  the  opening  paragraphs  of  which  he  says : 

"We  use  the  term  '  quasi  contract '  in  deference  to  writers  on  the 
science  of  jurisprudence  and  to  many  authors  of  works  on  technical 
law.  Personally  we  do  not  like  the  term  at  all.  The  qualifying  word 
quasi  is  too  frequenty  used  when  one  is  without  an  idea  and  wishes  to 
say  something,  or  has  an  idea  but  does  not  know  how  to  express  it.  ... 

"We  have  constructive  fraud,  constructive  trusts,  constructive 
notice,  and  why  not  constructive  contract,  a  contractual  obligation 
existing  in  contemplation  of  law,  in  the  absence  of  any  agreement  ex- 
press or  implied  from  facts  ?  " 

3  For  a  statement  of  the  reasons  why  the  term  "quasi  contract"  should 
not  be  abandoned,  see  Professor  Corbin's  article  on  "Quasi-Contractual 
Obligations,"  21  Yale  Law  Jour.  533,  545. 

4  The  use  of  the  term  "obligation"  in  reference  to  the  general  duty 
of  all  men  not  to  trespass,  steal,  and  so  forth,  is  of  doubtful  propriety. 
"In  English-speaking  countries,"  says  Sir  Frederick  Pollock  (8  Harv. 
Law  Rev.  188),  "an  unfortunate  habit  has  arisen  of  using  'obligation' 
in  a  lax  manner  as  coextensive  with  duties  of  every  kind." 


§  6]  INTRODUCTION 

quasi  contracts  are  superficially  unlike  the  duty  not  to  commit 
a  tort,  but  are  like  most  contracts  in  that  the  obligation  is 
positive  rather  than  negative;  the  obligor  is  required  to  act 
rather  than  to  forbear.1  A  more  substantial  difference  between 
quasi  contracts  and  the  duty  not  to  commit  a  tort  is  that  the 
former  are  what  have  been  called  particular  obligations,  i.e. 
obligations  imposed  because  of  a  special  state  of  facts  (as,  for 
instance,  the  receipt  of  money  paid  under  mistake)  and  in  favor 
of  a  particular  person,  while  the  latter  is  universal,  i.e.  an  obliga- 
tion or  duty  which  rests  upon  one  at  all  times  and  in  favor 
of  all  persons,  or  at  least  all  who  may  be  affected  by  one's  con- 
duct. Whenever  a  certain  person  is  under  a  particular  quasi 
contractual  obligation,  it  is  correlated  to  a  determinate  right 
in  personam  of  a  certain  other  person;  but  the  general  duty 
a  breach  of  which  constitutes  a  tort  is  not  correlated  to  any 
determinate  right,  either  in  personam  or  in  rem,  or  to  the  right 
of  any  particular  person  —  only  to  what  may  be  called  the 
general  right  in  rem  of  every  one  that  no  tort  shall  be  committed 
against  him. 

§  6.  (4)  Quasi  contracts  distinguished  from  equitable  obli- 
gations proper.  —  Quasi  contracts  are  frequently  referred  to  as 
equitable  in  character.2  And  they  are  equitable  in  the  sense 
that,  unlike  most  legal  obligations,  they  rest  not  at  all  upon 
formal  conceptions  inherited  from  the  days  of  more  primitive 
law,  but  solely  upon  the  universally  recognized  moral  obligation 
of  one  who  has  received  a  benefit,  the  retention  of  which  would 
be  unjust,  to  make  restitution.  But  they  are  legal  obligations, 
rather  than  equitable,  in  the  sense  that  they  originated  in  the 
courts  of  law  and  are  enforced  by  means  of  so-called  legal  as 
distinguished  from  equitable  remedies.  It  is  true  that  courts 
of  equity,  in  the  exercise  of  their  jurisdiction  to  reform  and 
rescind  contracts,  frequently  enforce  obligations  to  make  resti- 

1  Ames,  "History  of  Assumpsit,"  2  Harv.  Law  Rev.  53,  63;  Select 
Essays  in  Anglo-American  Legal  History,  Vol.  Ill,  259,  292  :  Keener, 
."Quasi-Contracts,"  p.  15. 

2  See,  for  examples,  Moses  v.  Macferlan,  1760,  2  Burr.  1005 ;  West- 
ern Assurance  Co.  v.  Towle,  1886,  65  Wis.  247 ;  26  N.  W.  104. 

8 


Chap.  I]  ESSENTIAL   ELEMENTS  [§  9 

tution,  but  such  obligations,  while  similar  in  many  respects  to 
those  enforced  at  law,  are  not  commonly  regarded  as  a  part  of 
the  law  of  quasi  contracts  and  will  not  be  treated  in  this  book. 
§  7.  (IV)  Essential  elements  of  quasi  contractual  obligation. 
—  In  order  to  establish  the  existence  of  a  quasi  contractual 
obligation  it  must  be  shown : 

(1)  That  the  defendant  has  received  a  benefit  from  the  plaintiff. 

(2)  That  the  retention  of  the  benefit  by  the  defendant  is  in- 
equitable. 

There  are 'certain  cases,  moreover,  in  which,  notwithstanding 
the  presence  of  both  of  the  above  elements,  the  courts  refuse, 
on  grounds  of  public  policy,  to  recognize  a  legal  obligation 
(post,  §§  87,  135,  156,  161,  187,  190). 

§  8.  (1)  Receipt  of  a  benefit.  —  The  word  "  enrichment " 
has  been  employed  by  previous  writers  to  describe  this  element 
of  quasi  contractual  obligation.  But  the  term  is  unsatisfactory 
in  that  it  connotes  an  actual  increase  of  the  defendant's  estate: 
Such  an  increase  of  estate,  as  will  be  seen  later,  must  sometimes 
appear  (post,  §§  107,  189) ;  but  there  are  many  cases,  on  the 
other  hand,  where  it  is  sufficient  to  show  that  the  defendant 
has  received  something  desired  by  him,  and  the  question  whether 
he  is  thereby  enriched  in  estate  is  irrelevant  (post,  §§  107,  118, 
119,  125).  For  example,  if  A  renders  services  and  furnishes 
material  in  the  erection  of  a  building  for  B  under  a  supposed 
contract  calling  for  such  services  and  material,  which  contract 
for  some  reason  is  invalid,  B  is  under  a  quasi  contractual 
obligation  to  pay  A  the  value  of  such  services  and  material 
whether  or  not  his  property  is  enhanced  in  value.1  The 
broader  term  "  benefit,"  used  in  the  sense  of  something  desired 
by  the  defendant  or  something  advantageous  to  him,  but 
not  necessarily  an  increase  of  his  estate,  seems  preferable. 

§  9.  (2)  Retention  of  benefit  inequitable:  Classification  of 
quasi  contracts.  —  It  is  of  the  essence  of  quasi  contractual 
obligation  that  the  retention  of  the  benefit  received  by  the  de- 
fendant would  be  unjust.  In  a  large  proportion  of  the  reported 

1  Vickery  v.  Ritchie,  1909,  202  Mass.  247 ;   88  N.  E.  835. 

9 


§  2]  INTRODUCTION 

cases  the  presence  of  this  element  of  obligation  is  the  question 
in  dispute;  and  since  the  answer  to  the  question  generally 
depends  upon  the  circumstances  under  which  the  benefit  is 
received  or  obtained,  it  is  convenient  to  classify  quasi  con- 
tractual obligations  according  to  the  nature  of  such  circum- 
stances. Adopting  this  principle  of  classification,  the  subject 
falls  into  three  grand  divisions: 

I.    Benefits  conferred  in  misreliance  on  a  right  or  duty. 
II.    Benefits  conferred  through  a  dutiful  intervention  in  an- 
other's affairs. 

III.  Benefits  conferred  under  constraint. 

Although,  as  a  matter  of  analysis,  the  topic  probably  should 
be  excluded  from  the  field  of  quasi  contract  (see  post,  §§  260, 
270),  it  seems  best  to  consider  also : 

IV.  The  action  for  restitution  as  an  alternative  remedy  for 
repudiation  or  breach  of  contract,  and  for  tort. 


10 


PART  I 

BENEFITS   CONFERRED    IN   MISRELIANCE  ON  RIGHT 

OR  DUTY 

CHAPTER    if 

GENERAL   PRINCIPLES 

§  10.  Definition  of  misreliance. 

1 11.  (I)  Causes  of  misreliance  :  Mistake  of  fact  and  mistake  of  law. 

§  12.  Same  :  Mistake  of  anticipated  fact. 

§  13.  (II)  Misreliance  negatived  : 

(1)  By  knowledge  or  belief. 

§  14.  Same  :  Forgotten  facts. 

§  15.  Same :  Negligent  failure  to  ascertain  facts. 

§  16.  (2)  By  doubt :  Assumption  of  risk. 

§  17.  (3)  By  compromise  or  settlement. 

§  18.  (Ill)  Misreliance  on  right  or  duty,  as  distinguished  from  policy. 

§  19.  (IV)  Misreliance  on  right  against  or  duty  to  third  person. 

§  20.  (V)  Circumstances  justifying  retention  of  benefit. 

§  21.  (1)  Plaintiff  guilty  of  misconduct  toward  defendant. 

§  22.  (2)  Plaintiff  under  moral  obligation  to  confer  benefit. 

§  23.  (3)  Plaintiff's  failure  to  place  defendant  in  statu  quo. 

§  24.  (4)  Plaintiff's  receipt  of  equivalent  benefit. 

§  25.  (5)  Change  of  position  by  defendant. 

§  26.  (a)  Change  of  position  must  be  irrevocable. 

§  27.  (&)  Payment  over  or  settlement  with  principal  as  defense  to 

agent. 

§  28.  (c)  Payment  over  as  defense  to  executor  or  administrator. 

§  29.  (d)  Beneficial  disposition  of  money  or  goods  not  a  defense. 

§  30.  (e)  Is  accidental  loss  or  theft  of  money  or  goods  a  defense  ? 

§  31.  (/)  Laches  as  a  defense. 

§  32.  (VI)  When  does  cause  of  action  arise  ?    Necessity  of  demand. 

§  33.  (VII)  Running  of  statute  of  limitations. 

§  34.  (VIII)  Recovery  of  interest. 

§  10.  Definition  of  misreliance.  —  The  term  "  misreliance," 
coined  by  Professor  Wigmore,1  is  used  for  the  sake  of  con- 
venient brevity  to  denote  a  reliance  which  results  from  a  mis- 

1  "A  Summary  of  Quasi-Contracts,"  25  Am.  Law  Rev.  695,  696. 

11 


§  12]  GENERAL  PRINCIPLES  [Part  1 

take  of  fact,  i.e.  an  erroneous  belief  that  a  certain  fact  exists 
or  will  exist.  By  benefits  conferred  in  misreliance  on  a  right 
or  duty,  therefore,  is  meant  benefits  conferred  under  the  induce- 
ment of  an  erroneous  belief  as  to  a  fact  essential  to  the  existence 
of  a  duty,  or  to  the  existence  or  availability  of  a  right.1 

§  11.  (I)  Causes  of  misreliance:  Mistake  of  fact  and  mis- 
take of  law.  —  The  word  "  fact,"  in  the  preceding  section,  is 
used  in  the  broadest  sense.  As  the  word  is  ordinarily  employed 
by  courts  and  lawyers,  however,  what  may  be  called  "  legal 
facts  "  are  excluded.  Questions  of  law,  for  example,  are  always 
distinguished  from  questions  of  fact.2  Recognizing  this  dis- 
tinction, misreliance  on  a  right  or  duty  may  be  said  to  result 
from  either  (1)  a  mistake  of  fact,  or  (2)  a  mistake  of  law.  Thus, 
if  A  pays  taxes  to  B  under  the  belief  that  the  payee  is  C,  the 
person  authorized  by  law  to  receive  taxes,  his  mistake  is  one  of 
fact ;  but  if  he  pays  them  to  B  under  the  belief  that  B  is  author- 
ized by  law  to  receive  taxes,  whereas  C  is  the  person  so  author- 
ized, his  mistake  is  one  of  law.  Upon  principle  there  is  no  reason 
why  a  quasi  contractual  obligation  should  not  be  recognized  in 
favor  of  one  who  has  acted  under  a  mistake  of  law  as  well  as  in 
favor  of  one  who  has  acted  under  a  mistake  of  fact.  And  in 
some  classes  of  cases,  as  will  be  seen  later  (post,  §§  94,  134),  no 
difference  is  recognized.  It  is  nevertheless  a  widely  accepted 
rule,  based  upon  supposed  considerations  of  public  policy,  that 
"money  paid  under  a  mistake  of  law  cannot  be  recovered." 
The  state  of  the  law  on  this  subject  and  the  grounds  for  denying 
relief  are  examined  in  another  chapter  (post,  §  35  et  seq.}. 

§  12.  Same  :  Mistake  of  anticipated  fact.  —  Cases  frequently 
occur  in  which  a  benefit  is  conferred  upon  the  assumption  that 
a  certain  event  will  happen  or  that  a  certain  present  fact 
will  continue  to  exist,  which  assumption  proves  to  be  errone- 
ous. For  example,  freight  is  paid  in  advance  upon  the 

1  Though  one  is  under  an  erroneous  belief  as  to  a  certain  fact,  if  such 
belief  is  not  a  controlling  inducement  to  action,  he  cannot  be  said  to 
rely  upon  it.     See  White  v.  Dotter,  1904,  73  Ark.  130 ;  83  S.  W.  1052. 

2  For  an  admirable  discussion  of  the  distinction  between  questions  of 
law  and  questions  of  fact,  see  Keener,  "  Quasi-Contracts,"  pp.  96-112. 

12 


Chap.  II]  MISRELIANCE   NEGATIVED  [§13 

assumption  that  the  voyage  will  be  completed,  whereas  it 
happens  that  the  vessel  is  captured  or  lost  en  route  (post,  §  129). 
Such  an  erroneous  assumption  may  be  called  a  mistake  of  an- 
ticipated fact.  It  is  clearly  within  the  bounds  of  the  general 
concept  of  misreliance. 

§  13.  (II)  Misreliance  negatived :  (1)  By  knowledge  or 
belief.  —  One  who  either  knows  or  believes  that  he  is  under  no 
legal  obligation  to  confer  a  certain  benefit  upon  another  and  that 
he  will  acquire  no  right  thereby,  but  nevertheless  confers  the 
benefit,  cannot  justly  claim  restitution  upon  the  theory  of  mis- 
reliance:  * 

National  Life  Insurance  Company  v.  Jones,  1873,  1  Thomp.  & 
C.  (N.  Y.  Sup.  Ct.)  466 ;  a/.  59  N.  Y.  649 :  Action  to  recover 
money  paid  by  the  company  upon  a  policy  of  insurance.  The 
grounds  upon  which  recovery  was  sought  were  that  the  policy 
had  been  obtained  by  fraudulent  representations  and  warranties. 
It  appeared,  however,  that  the  officer  of  the  company  believed, 
at  the  time  of  payment,  that  the  policy  had  been  obtained  by 
fraud,  and  paid  the  claim,  "  in  part,  because  of  the  evil  effect 
which  a  resistance  of  the  claim  would  have  upon  the  reputation 
of  the  company  in  the  event  of  an  unsuccessful  resistance ;  also 
from  some  expected  benefit,  which,  in  some  general  way,  might 
result  to  the  company  from  prompt  payment."  TALCOTT,  J. 
(p.  472) :  "The  plaintiff  believing  that  a  good  defense  existed 
to  the  demand  might  be  unwilling  to  encounter  the  risk  of 
undertaking  to  prove  it,  might  doubt  whether  it  could  be  proved 
with  sufficient  clearness  to  secure  a  verdict,  and  for  that  reason 
have  concluded  that  it  was  better  to  pay  than  to  encounter  a  liti- 
gation which  might  prove  unsuccessful.  In  such  case  a  payment 
is  not  made  under  a  mistake  of  fact,  but  upon  the  ground  that, 
notwithstanding  the  fact,  it  is  for  the  interest  of  the  party 
paying  to  make  the  payment.  So,  too,  the  finding  that  the 
payment  was  made  not  in  reliance  upon  a  false  belief  as  to  the 
facts,  but  from  other  motives,  inclining  the  plaintiff  to  the  belief 
that  it  was  for  its  interest  to  assume  the  false  state  of  facts  to  be 
true,  and  pay  without  further  question  or  inquiry  is  a  sufficient 
ground  for  sustaining  the  decision.  If  the  payment  be  not  solely 
in  reliance  upon  a  falsely  assumed  state  of  facts,  but  from  mixed 
motives,  so  that  the  payer,  while  not  believing  the  assumed  state 

13 


§  13]  GENERAL  PRINCIPLES  [Part  I 

of  facts,  voluntarily  waives  all  investigation  or  inquiry  in 
view  of,  and  influenced  by  other  motives  to  the  payment, 
he  has  not  paid  on  the  faith  of  a  false  state  of  facts,  and  thereby 
influenced  to  the  payment,  but  upon  other  considerations." 

Windbiel  v.  Carroll,  1878,  16  Hun  (N.  Y.  Sup.  Ct.)  101 : 
Action  to  recover  money  paid  on  a  mortgage,  upon  the  ground 
that  it  was  an  overpayment.  LEARNED,  P.J.  (p.  103) :  "  Igno- 
rance of  a  fact  is  one  thing ;  ignorance  of  the  means  of  prov- 
ing a  fact  is  another.  When  money  voluntarily  paid  is  re- 
covered back,  it  is  because  there  was  a  mistake  as  to  some  fact. 
But  here  the  plaintiff  was  not  mistaken  as  to  the  fact.  Only 
at  the  time  he  did  not  know  how  to  prove  it.  The  subsequent 
discovery  of  evidence  to  prove  a  fact,  known  to  the  party  when 
he  makes  the  payment,  cannot  authorize  a  recovery  back  of  the 
money.  Such  a  principle  would  be  most  dangerous."  l 

In  Tennessee,  however,  it  has  been  held  that  nothing  short 
of  knowledge  or  "  moral  certainty  "  will  negative  misreliance : 

Guild  v.  Baldridge,  1852,  2  Swan  (32  Tenn.)  294 :  Action 
to  recover  money  alleged  to  have  been  paid  under  a  mistake 
of  fact.  The  plaintiff  purchased  logs  from  one  Manning  for 
which  he  in  part  paid  Manning  and  took  his  receipt.  Some 
years  later  a  constable  had  in  his  hands  executions  against  Mail- 
ing, the  proceeds  of  which  were  to  be  paid  over  to  the  defendant. 
Manning  had  promised  the  constable  to  let  the  plaintiff  have 
some  logs  to  discharge  the  executions,  so  the  constable  called 
upon  the  plaintiff  and  requested  payment.  On  two  occasions 
the  plaintiff  told  the  constable  that  he  thought  he  had  paid 
Manning,  and  finally  in  the  presence  of  the  defendant  the  plaintiff 
said  that  "he  believed  he  had  paid  the  debt,  but  that  he  had 
nothing  to  show  payment ;  and  as  Manning  was  dead  he  would 
have  no  bad  feelings  about  it,  and  rather  than  have  them  he 
would  pay  it  again."  The  trial  court  instructed  the  jury  that 
"  if  the  plaintiff,  believing  that  he  had  paid  the  debt  to  Manning 
but  choosing  to  pay  it  again  rather  than  be  supposed  to  withhold 

1  See  also  Stokes  v.  Lewis,  1785,  1  Term  R.  20 ;  Holt  v.  Thomas, 
1894,  105  Cal.  273;  38  Pac.  891;  Citizens'  Bank  v.  Rudisill,  1908, 
4  Ga.  App.  37 ;  60  S.  E.  818 ;  Frambers  v.  Risk,  1877,  2  111.  App.  499, 
504 ;  Mowatt  v.  Wright,  1828,  1  Wend.  (N.  Y.)  355 ;  19  Am.  Dec. 
508.  But  see  Bond  v.  Hays,  1815,  12  Mass.  34. 

14 


Chap.  II]  MISRELIANCE   NEGATIVED  [§  14 

it,  paid  the  money  to  the  defendant,  as  the  creditor  of  Manning, 
without  any  understanding  with  the  defendant  that  the  money 
should  be  refunded  in  any  event,  then  the  plaintiff  would  not  be 
entitled  to  recover."  But  this  instruction  was  held  improper 
by  the  Supreme  Court,  which  declared  (McKiNNEY,  J.,  writing 
the  opinion,  p.  302)  that  a  recovery  could  not  be  resisted 
"on  the  ground  that  the  plaintiff,  at  the  time  of  payment,  may 
have  entertained  and  expressed  a  vague  belief,  resting  on  no 
evidence  and  amounting  to  nothing  like  conviction  or  moral 
certainty,  that  he  had  previously  paid  the  debt.  The  authorities 
cited  require  that  he  shall  have  had  knowledge  of  the  facts, 
and  that  term  must  be  used  in  its  ordinary  sense." 

§  14.  Same  :  Forgotten  facts.  —  The  knowledge  or  belief 
that  negatives  misreliance  is  a  knowledge  or  belief  present  to 
the  mind  at  the  time  the  benefit  is  conferred.  One  who  has 
forgotten  a  fact  once  known  to  him,  or  believed  by  him,  and 
consequently  falls  into  an  erroneous  conception  of  his  right  or 
duty,  is  just  as  much  entitled  to  relief  as  if  he  had  never  known 
the  fact.  If  it  were  held  otherwise,  "  a  man's  rights  would 
depend  upon  the  strength  of  his  memory  "  : l  * 

Kelly  v.  Solari,  1841,  9  Mees.  &  Wels.  54:  Action  by  a 
director  of  an  insurance  company  to  recover  money  paid 
on  a  policy.  The  directors  who  paid  the  money  had  been 
informed  that  the  policy  had  lapsed  by  reason  of  the  non- 
payment of  a  premium,  but  they  testified  that  at  the  time  of 
paying  the  money  they  had  entirely  forgotten  that  the  policy 
had  lapsed.  Lord  ABINGER,  C.B.  (p.  58) :  "I  certainly  laid 
down  the  rule  too  widely  to  the  jury,  when  I  told  them  that  if  the 
directors  once  knew  the  facts,  they  must  be  taken  still  to  know 
them,  and  could  not  recover  by  saying  that  they  had  since  for- 
gotten them.  I  think  the  knowledge  of  the  facts  which  disen- 
titles the  party  from  recovering  must  mean  a  knowledge  existing 
in  the  mind  at  the  time  of  payment." 

Citizens'  Bank  v.  Rudisill,  1908,  4  Ga.  App.  37 ;  60  S.  E.  818 : 
POWELL,  J.  (p.  41) :  "The  word  'knowledge,'  when  applied 
in  this  connection,  is  not,  however,  used  in  the  broad  sense  in 

1  BIRCHABD,  J.,  in  Nannan  v.  Will,  1846,  1  Ohio  Dec.  261 ;  5  West. 
Law  Jour.  508. 

15 


§  15]  GENERAL  PRINCIPLES  [Part  I 

which  it  is  sometimes  used.  A  man  may  have  a  fact  in  memory, 
but  at  a  given  moment  his  faculty  of  recollection  may  not 
present  it  to  him.  For  example,  you  pay  a  debt,  and,  being  a 
conscious  agent,  you,  of  course,  possess  the  cognition  of  the  fact. 
Your  memory  stores  it  away.  Later  your  creditor  presents 
his  demand  again.  Though  in  the  broad  sense  knowing  that 
you  have  paid  it,  and  though  still  holding  that  fact  dormant  in 
your  memory,  yet  not  recalling  it  —  that  is,  forgetting  it  — 
you  pay  it  again.  In  such  cases,  for  the  purposes  of  the  prin- 
ciples we  are  discussing,  you  are  not  considered  as  having  knowl- 
edge of  the  fact."  1 

§  15.  Same  :  Negligent  failure  to  ascertain  facts.  —  Analo- 
gous to  the  case  of  one  who  forgets  a  fact  affecting  his  legal  right 
or  duty,  is  that  of  one  whose  ignorance  is  due  to  his  failure  to 
avail  himself  of  means  of  knowledge.  No  matter  how  close  at 
hand  the  means  of  knowledge  may  be,  no  matter  how  stupid 
or  careless  the  failure  to  ascertain  the  truth  may  be,  if  one 
confers  a  benefit  under  an  honest  mistake,  i.e.  in  unconscious 
ignorance  of  the  truth,  the  retention  of  the  benefit  is  ordinarily 
inequitable.  By  the  weight  of  authority  restitution  may  be 
enforced :  * 

Kelly  v.  Solari,  1841,  9  Mees.  &  Wels.  54 :  PARKE,  B.  (p.  59) : 
"  but  if  it  [money]  is  paid  under  the  impression  of  the  truth  of 
a  fact  which  is  untrue,  it  may,  generally  speaking,  be  recovered 
back,  however  careless  the  party  paying  may  have  been,  in 
omitting  to  use  due  diligence  to  inquire  into  the  fact." 

Rutherfordv.  Mclwr,  1852, 21  Ala.  750 :  DARGAN,  C.J.  (p.  756) : 
"  I  cannot  yield  my  assent  to  the  proposition,  that  the  means  of 
ascertaining  the  real  facts  of  the  case  are  tantamount  to  actual 
knowledge  of  them.  If  this  were  the  rule,  then  it  would  be  but 
rare  that  money  paid  by  mistake  could  ever  be  recovered  back. 
For  instance :  if,  in  the  settlement  of  an  account,  a  mistake  in 

1  Accord:  Lucas  v.  Worswick,  1833,  1  Moody  &  Rob.  293 ;  Lewellen 
v.  Garrett,  1877,  58  Ind.  442 ;  26  Am.  Rep.  74 ;  Simms  v.  Vick,  1909, 
151  N.  C.  78;  65  S.  C.  621 ;  24  L.  R.  A.  (N.  S.)  517.  And  see  John- 
son ».  Saum,  1904,  123  la.  145 ;  98  N.  W.  599 ;  Guild  v.  Baldridge,  1852, 
2  Swan  (32  Tenn.)  294 ;  Perry  v.  Newcastle,  etc.,  Ins.  Co.,  1852,  8  U. 
C.  Q.  B.  363,  367. 

16 


Chap.  II]  MISRELIANCE   NEGATIVED  [§  15 

the  calculation  was  made,  it  could  not  be  afterward  corrected  by 
suit,  because  the  parties,  having  competent  knowledge  of  figures, 
had  the  means  of  knowledge ;  and  the  mistake  being  the  result 
of  negligence,  rather  than  the  want  of  knowledge,  the  parties 
would  be  bound  to  abide  by  it."  x 

1  Also :  Townsend  v.  Crowdy,  1860,  8  C.  B.  N.  S.  477 ;  Brown  v. 
Tillinghast,  1897,  84  Fed.  71  (C.  C.,  Wash.) ;  Merrill  ».  Brantly,  1902, 
133  Ala.  537;  31  So.  847;  Devine  v.  Edwards,  1881,  101  111.  138; 
Brown  v.  College  Corner,  etc.,  Road  Co.,  1877,  56  Ind.  110;  Fraker  v. 
Little,  1880,  24  Kan.  598 ;  36  Am.  Rep.  262 ;  First  Nat.  Bank  v.  Behon, 
1891, 91  Ky.  560 ;  16  S.  W.  368 ;  13  Ky.  Law  Rep.  148 ;  Baltimore,  etc., 
R.  Co.  v.  Faunce,  1847,  6  GiU  (Md.)  68 ;  46  Am.  Dec.  655 ;  Appleton 
Bank  v.  McGilvray,  1855,  4  Gray  (Mass.)  518;  64  Am.  Dec.  92; 
Pingree  v.  Mutual  Gas  Co.,  1895,  107  Mich.  156 ;  65  N.  W.  6 ;  Koontz 
v.  Central  Nat.  Bank,  1873,  51  Mo.  275 ;  Dobson  v.  Winner,  1887,  26 
Mo.  App.  329  (see,  however,  Union  Savings  Assn.  v.  Kehlor,  1879, 
7  Mo.  App.  158,  165) ;  Douglas  County  v.  KeUer,  1895,  43  Neb.  635 ; 
62  N.  W.  60 ;  Waite  v.  Leggett,  1828,  8  Cow.  (N.  Y.)  195 ;  18  Am. 
Dec.  441 ;  Kingston  Bank  v.  Eltinge,  1869,  40  N.  Y.  391 ;  100  Am.  Dec. 
516;  Hathaway  v.  County  of  Delaware,  1906,  185  N.  Y.  368,  370; 
78  N.  E.  153 ;  13  L.  R.  A.  (N.  S.)  273 ;  113  Am.  St.  Rep.  909 ;  Payne 
«.  Witherbee,  Sherman  &  Co.,  1909,  132  App.  Div.  579;  117  N.  Y. 
Supp.  15 ;  Simms  v.  Vick,  1909,  151  N.  C.  78 ;  65  S.  E.  621 ;  24  L.  R.  A. 
(N.  S.)  517  (cf.  Brummitt  v.  McGuire,  1890,  107  N.  C.  351 ;  12  S.  E. 
191) ;  James  River  Nat.  Bank  v.  Weber,  1910,  19  N.  D.  702 ;  124  N.  W. 
952 ;  McKibben  v.  Doyle,  1896,  173  Pa.  St.  579 ;  34  Atl.  455 ;  51  Am. 
St.  Rep.  785;  Houston,  etc.,  R.  Co.  v.  Hughes,  1911,  Tex.  Civ. 
App.  ;  133  S.  W.  731 ;  City  Nat.  Bank  v.  Peed,  1899,  (Va.)  32 
S.  E.  34.  And  see  Johnson  v.  Saum,  1904,  123  la.  145 ;  98  N.  W.  599 ; 
Guild  v.  Baldridge,  1852,  2  Swan  (32  Tenn.)  294. 

The  following  cases  in  one  degree  or  another  decline  to  go  to  the 
full  extent  of  the  principle :  Grymes  v.  Sanders,  1876,  93  U.  S.  55 ; 
East-Haddam  Bank  v.  Scovil,  1837,  12  Conn.  303,  310 ;  Stanley  Rule 
&  Level  Co.  v.  Bailey,  1878,  45  Conn.  464,  466,  ("There  may  be  such 
full  and  complete  means  of  knowledge  as  to  be  equivalent  to  knowl- 
edge itself.");  West  v.  Houston,  1844,  4  Harr.  (Del.)  170,  ("Where 
there  is  a  payment  in  ignorance  of  a  fact,  it  may  be  recovered  back, 
unless  the  mistake  arises  from  the  negligence  of  the  party  to  examine 
and  take  notice  of  information  within  his  full  means  of  knowledge.") ; 
Board  of  Commrs.  v.  Gregory,  1873,  42  Ind.  32 ;  Norton  v.  Marden, 
1838,  15  Me.  45,  47;  32  Am.  Dec.  132,  ("But  it  is  insisted  that  the 
plaintiff  had  the  means  of  correct  knowledge.  And,  in  one  sense  a 
person  may  be  said  always  to  have  the  means  of  knowledge.  He  may 
have  access  to  books,  and  to  the  assistance  and  instructions  of  his 
fellow  men.  But  the  means  of  knowledge  which  the  law  requires  are 
such  as  the  party  may  avail  himself  of  as  then  present,  without  calling 
to  his  aid  other  assistance.") ;  Ash  v.  McLellan,  1905,  101  Me.  17 ;  62 

17 


§  16]  GENERAL  PRINCIPLES  [Part  I 

There  are  some  cases,  however,  as  will  appear  later,  in  which 
the  equities  are  so  nearly  equal  that  if  it  appears  that  the  plain- 
tiff's mistake  was  the  result  of  his  own  negligence,  the  scales 
will  be  tipped  against  him  and  he  will  be  denied  relief  (post, 
§25). 

§  16.  (2)  By  doubt :  Assumption  of  risk.  —  One  who  enter- 
tains a  doubt  as  to  the  existence,  present  or  future,  of  a  certain 
fact,  cannot  be  said  to  believe  in  and  rely  upon  that  fact.  If 
he  acts  with  any  doubt  that  the  fact  exists  or  will  exist,  he  is 
consciously  "  taking  a  chance."  And  if  it  develops  that  his 
doubt  was  well  founded,  he  cannot  justly  claim  to  be  the  victim 
of  a  mistake.  It  follows  that  if  the  fact  doubted,  but  assumed 
to  be  true,  was  essential  to  the  existence  of  a  duty  or  the  availa- 
bility of  a  right,  he  cannot  claim  to  have  acted  in  misreliance 
on  such  right  or  duty.  Thus,  if  A  pays  money  to  B  on  account 
of  a  bill  for  services  rendered  although  suspecting  that  he  has 
already  paid  it  or  doubting  whether  the  services  have  actually 
been  rendered,  he  assumes  the  risk  that  by  reason  of  the  pre- 
vious payment  or  of  the  nonperformance  of  the  service,  he 
is  under  no  duty  to  make  the  payment.  So,  if  A  contracts 
unconditionally  to  make  certain  improvements  upon  B's 
premises,  though  doubtful  of  his  ability  to  obtain  some  of  the 
materials  required  for  such  improvements,  he  assumes  the  risk 
that  by  reason  of  a  failure  to  obtain  such  materials  he  will 

Atl.  598;  Alton  i>.  First  Nat.  Bank,  1892,  157  Mass.  341,  344;  32 
N.  E.  228;  18  L.  R.  A.  144;  34  Am.  St.  Rep.  285,  ("A  mistake  as  to 
a  fact  .  .  .  would  not  warrant  a  recovery,  when,  as  here,  the  fact  was 
a  matter  equally  open  for  the  inquiry  and  judgment  of  both  parties, 
and  the  defendant  had  a  right  to  assume  that  the  plaintiff  relied  wholly 
on  his  own  means  of  information.");  Advertiser,  etc.,  Co.  v.  City  of 
Detroit,  1880,  43  Mich.  116;  5  N.  W.  72 ;  Wheeler  v.  Hatheway,  1885, 
58  Mich.  77 ;  24  N.  W.  780  (cf.  Pingree  v.  Mutual  Ins.  Co.,  1895, 
107  Mich.  156;  65  N.  W.  6);  Peterborough  v.  Lancaster,  1843,  14 
N.  H.  382,  389 ;  Brummitt  ».  McGuire,  1890,  107  N.  C.  351 ;  12  S.  E. 
191,  193,  ("Nor,  if  the  payment  be  made  in  ignorance  or  mistake  of 
fact,  can  it  be  recovered  back,  where  the  means  of  knowledge  or  in- 
formation is  in  reach  of  the  party  paying,  and  he  is  negligent  in  obtain- 
ing it.");  First  Nat.  Bank  v.  Taylor,  1898,  122  N.  C.  569;  29  S.  E. 
831 ;  Stevens  v.  Head,  1837,  9  Vt.  174 ;  31  Am.  Dec.  617 ;  Simmons 
».  Looney,  1896,  41  W.  Va.  738;  24  S.  E.  677,  678-9. 

18 


Chap.  II]  MISREllAN 


MISKELIANCE   NEGATIVED 

not  acquire  a  contract  right  to  compensation.  In  either  case, 
if  A's  suspicion  or  doubt  turns  out  to  have  been  well  founded, 
he  is  not  entitled  to  restitution.  B,it  is  true,  has  received  some- 
thing for  nothing ;  but  why  should  a  court  of  law  assist  A  to 
recover  what  he  has  consciously  risked  and  lost  ?  * 

This  incompatibility  of  assumption  of  risk  with  misreliance 
has  not  always  been  detected.1  The  question  is  most  likely  to 
be  raised  in  cases  of  benefits  conferred  in  part  performance  of 
a  contract  by  one  who  fails  to  complete  his  performance.  For 
a  further  discussion,  therefore,  the  reader  is  referred  to  the 
chapters  dealing  with  contracts  unenforceable  because  of  im- 
possibility of  performance  (post,  §  112  et  seq.},  and  contracts 
unenforceable  because  of  the  plaintiff's  breach  (post,  §  164  et. 
seq.}. 

§  17.  (3)  By  compromise  or  settlement.  —  If  there  is  a  differ- 
ence of  opinion  between  A  and  B  as  to  the  existence  of  a  fact 
essential  to  an  obligation  from  A  to  B,  and  a  compromise  is 
effected  between  them,  A  cannot,  upon  learning  that  his  belief 
in  the  nonexistence  of  the  fact  was  well  founded,  recover  a 
benefit  conferred  pursuant  to  such  compromise.2  His  belief  in 

1  In  Chatfield  v.  Paxton,  a  case  cited  in  Bilbie  v.  Lumley,   1802, 
2  East  469,  471,  and  briefly  reported  in  a  note  to  that  case,  ASHHURST,  J., 
is  said  to  have  expressed  the  opinion  that  "where  a  payment  had  been 
made  not  with  full  knowledge  of  the  facts,  but  only  under  a  blind  sus- 
picion of  the  case,  and  it  was  found  to  have  been  paid  unjustly,  the  party 
might  recover  it  back  again."     But,  according  to  Lord  ELLENBOROUGH, 
"it  was  so  doubtful  at  last  on  what  precise  ground  the  case  turned  that 
it  was  not  reported."      See  also  Guild  v.  Baldridge,  1852,  2  Swan  (32 
Tenn.)  294,  which  is  stated  and  quoted,  ante,  §  13. 

2  Troy  v.  Bland,  1877,  58  Ala.  197 ;  Jones  v.  Fulwood,  1852,  12  Ga. 
121 ;  Thompson  v.  Nelson,  1867,  28  Ind.  431 ;  New  York  Life  Ins.  Co. 
v.  Chittenden,  1907,  134  la.  613,  620 ;  112  N.  W.  96 ;  11  L.  R.  A.  (N.  S.) 
233,  237  ;   120  Am.  St.  Rep.  444 ;  Carter  v.  Iowa,  etc.  Loan  Ass'n,  1907, 
135  la.  368;    112  N.  W.  828;    Brooks   v.  Hall,  1887,  36  Kan.    697; 
14  Pac.  236 ;   Stuart  v.  Sears,  1875,  119  Mass.  143 ;   Lamb  v.  Rathburn, 
1898,  118    Mich.  666;    77    N.  W.  268;    Pearl    v.  Whitehouse,  1872, 
52  N.  H.  254 ;    Moore  v.  Fitzwater,   1824,  2    Rand.   (Va.)  442.     See 
Bennett  v.  Bates,  1884,  94  N.  Y.  354,  373 ;  Sears  v.  Grand  Lodge,  1900, 
163  N.  Y.  374 ;  57  N.  E.  618 ;  50  L.  R.  A.  204 ;  Consolidated  Fruit  Jar 
Co.  v.  Wisner,  1905,  103  App.  Div.  453;    93  N.  Y.  Supp.  128,  131. 
Cf.  Worth  v.  Stewart,  1898,  122  N.  C.  258 ;   29  S.  E.  579. 

19 


§  17]  GENERAL  PRINCIPLES  [Part  I 

the  nonexistence  of  the  fact  is  convincing  evidence  that  there 
was  no  misreliance,  but  that  the  benefit  was  conferred  from 
some  other  motive,  e.g.  to  avoid  litigation  or  dispute.  More- 
over, to  permit  a  recovery  would  be  utterly  to  destroy  the 
stability  of  compromise  contracts. 

The  foregoing  considerations  apply  with  equal  force  where 
there  is  no  difference  of  opinion  between  A  and  B  as  to  the 
existence  of  the  fact,  but  where  both  are  in  doubt  as  to  its 
existence.  If  they  choose  to  settle  upon  certain  terms,  with- 
out ascertaining  the  truth,  A  cannot,  upon  learning  that  the 
fact  did  not  exist,  recover  a  benefit  conferred  pursuant  to  the 
settlement.1 

Care  must  be  taken,  in  these  cases  of  compromise  and  settle- 
ment, to  distinguish  the  case  in  which  the  fact  disputed  or 
doubted  turns  out  to  have  been  nonexistent,  and  the  case  in 
which  another  fact,  essential  to  the  obligation  but  not  doubted, 
turns  out  to  to  have  been  nonexistent.  In  the  latter  case,  there 
is  a  genuine  misreliance  upon  a  supposed  duty  and  a  benefit 
conferred  pursuant  to  the  compromise  or  settlement  may  be 
recovered:  * 

Rheel  v.  Hicks,  1862,  25  N.  Y.  289 :  Action  to  recover 
money  paid  to  the  defendant,  the  county  superintendent  of 
the  poor.  One  Louisa  Hehr  had  testified  that  she  was  preg- 
nant and  that  the  plaintiff  was  the  father  of  the  unborn 
child.  The  plaintiff  was  arrested  and  in  compromise  of  the 
claim  for  the  support  of  the  child  paid  fifty  dollars  to  the 
defendant.  It  subsequently  developed  that  Louisa  Hehr  had 
not  been  pregnant,  and  this  action  was  brought.  WRIGHT,  J. 
(p.  291) :  "The  plaintiff  was  charged  with  being  the  father  of 
a  child  likely  to  be  born  a  bastard,  of  which  Louisa  Hehr  was 
alleged  to  be  pregnant.  Both  the  plaintiff  and  defendant  acted 
upon  an  erroneous  assumption  that  she  was  pregnant,  and  they 
compromised  relative  to  the  support  of  the  child  that,  it  was 
supposed,  would  be  born  a  bastard  and  become  chargeable  to 

1  See  New  York  Life  Ins.  Co.  v.  Chittenden,  1907,  134  la.  613,  620 ; 
112  N.  W.  96;  11  L.  R.  A.  (N.  S.)  233,  237;  120  Am.  St.  Rep.  444; 
Kowalke  v.  Milwaukee  Elec.,  etc.,  Co.,  1899,  103  Wis.  472 ;  79  N.  W. 
762 ;  74  Am.  St.  Rep.  877. 

20 


Chap.  II]  MISRELIANCE   NEGATIVED  [§17 

the  county.  .  .  .  The  fact  as  to  who  was  the  father  of  the 
child  may  have  been  waived  by  the  compromise,  but  not  the 
vital  fact  which  gave  it  all  its  force  and  without  the  existence 
of  which  the  superintendent  had  no  power  to  act,  viz.  the 
pregnancy  of  Louisa  Hehr.  There  was  no  disagreement  or 
compromise  between  the  plaintiff  and  the  defendant  as  to  the 
fact  of  pregnancy.  They  both  believed  and  acted  upon  the 
assumption  that  she  was  pregnant,  and  it  turns  out  that  they 
were  both  mistaken.  As  there  was  no  pregnancy,  the  county 
has  not  been  put  to  any  expense,  and  never  can  be,  and  as 
the  plaintiff  paid  his  money  to  indemnify  the  county  under  a 
mistake  of  fact,  I  think  he  was  entitled  to  maintain  this 
action."  l 

Wheadon  v.  Olds,  1838,  20  Wend.  (N.  Y.)  174:  Action 
to  recover  a  portion  of  the  money  paid  for  a  quantity  of  oats. 
The  defendant  agreed  to  sell  to  the  plaintiff  from  1600  to  2000 
bushels  of  oats  at  49  cents  per  bushel.  The  delivery  of  the  oats 
was  commenced  by  removing  them  from  a  storehouse  to  a  canal 
boat;  tallies  were  kept,  and  when  the  tallies  amounted  to 
500,  it  was  proposed  to  guess  at  the  remainder;  and  after  a 
while  it  was  agreed  between  the  parties  to  call  the  whole  quantity 
1900  bushels,  and  the  plaintiff  accordingly  paid  for  that 
quantity  at  the  stipulated  price.  When  the  oats  came  to  be 
measured  it  was  ascertained  that  there  were  only  1488  bushels 
delivered.  It  was  then  found  that  the  mistake  had  happened 
by  both  parties  assuming  as  the  basis  of  the  negotiation  fixing 
the  quantity  of  1900  bushels,  that  500  bushels  had  been  loaded 
in  the  boat  at  the  time  when  they  undertook  to  guess  at  the 
residue,  whereas  in  fact  only  250  bushels  had  been  loaded,  — 
the  tallies  representing  half  bushels  and  not  bushels,  —  and  that 
the  parties  supposed  that  the  quantity  loaded  was  not  a  quarter 
of  the  whole  quantity.  The  vendor  refusing  to  refund  a  por- 
tion of  the  money  received  by  him,  this  action  was  brought  by 
the  purchaser,  who  declared  for  money  had  and  received. 
COWEN,  J.  (p.  176) :  "All  the  excess  of  payment  arose  from  a 
count  of  half  bushels  as  bushels.  And  the  only  question  in  the 
least  open  is,  whether  an  agreement,  based  on  that  mistake,  to 

1  Cf.  Lawton  v.  Campion,  1854,  18  Beav.  87,  97-8 ;  Thompson  v. 
Nelson,  1867,  28  Ind.  431,  in  which  the  dispute  compromised  was  as 
to  the  fact  of  pregnancy,  and  not  as  to  the  fact  of  fatherhood. 

21 


§  17]  GENERAL  PRINCIPLES  [Part  I 

accept  the  oats  at  the  plaintiff's  own  risque  of  the  quantity, 
shall  conclude  him.  The  mistake  which  entitles  to  this  action, 
is  thus  stated  by  the  late  Chief  Justice  Savage  from  the  civil 
law :  '  An  error  of  fact  takes  place,  either  when  some  fact  which 
really  exists  is  unknown,  or  some  fact  is  supposed  to  exist  which 
really  does  not  exist.'  ...  In  judging  of  its  legal  effect,  we 
must  look  '  to  the  regard  which  the  contractors  have  had  to  the 
fact  which  appeared  to  them  to  be  true.'  And  when  we  see 
that  the  agreement  is  the  result  of  such  a  regard,  or,  as  the  judge 
said  to  the  jury,  is  based  upon  it,  I  am  not  aware  of  any  case  or 
dictum,  that  because  part  of  the  agreement  is  to  take  at  the  party's 
own  risque,  or,  as  the  parties  expressed  it,  here,  hit  or  miss,  it 
therefore  forms  an  exception  to  the  general  rule.  The  agree- 
ment to  risk  was,  pro  tanto,  annulled  by  the  error."  l 

Care  must  be  taken  also  to  distinguish  a  settlement  made 
by  way  of  compromise  or  without  regard  to  the  actual  facts 
and  a  settlement  made  by  one  who,  though  at  first  doubtful  of 
his  obligation,  satisfies  himself  by  an  investigation  of  the  facts 
that  the  claim  against  him  is  valid,  only  to  learn,  after  the 
settlement,  that  his  original  doubt  was  well  founded.  In  the 
latter  case,  the  benefit  is  conferred  by  one  who,  at  the  time,  is 
conscious  of  no  doubt  and  consequently  assumes  no  risk.  It 
is  a  benefit  conferred  in  misreliance  upon  a  supposed  duty, 
and  the  retention  of  the  benefit  is  inequitable. 

The  distinction  just  pointed  out  appears  to  have  been 
overlooked  in  a  Michigan  case : 

Me  Arthur  v.  Luce,  et  al.,  1880,  43  Mich.  435;  5  N.  W.  451 ; 
38  Am.  Rep.  204.  The  defendants  demanded  in  good  faith, 
that  the  plaintiff  pay  them  for  logs  cut  upon  their  land. 
"When  the  claim  was  made  upon  the  plaintiff  he  employed  a 
surveyor  and  they  went  upon  the  land,  and  the  plaintiff  then 
became  satisfied  that  he  had  cut  and  taken  logs  from  off  the 
defendants'  land,  and  authorized  a  settlement  to  be  made, 
which  was  done.  This  was  in  1871  and  all  parties  rested  in  the 
belief  that  a  correct  settlement  had  been  made  until  sometime 
in  1875,  when  a  new  survey  established  the  fact  that  no  logs  had 

1  Cf.  Calkins  v.  Griswold,  1877,  11  Hun  (N.  Y.  Sup.  Ct.)  208. 

22 


Chap.  II]  MISRELIANCE   NEGATIVED  [§  17 

been  cut  upon  the  defendants'  land,  and  this  action  was  brought 
to  recover  back  the  moneys  paid,  upon  the  claim  of  having  been 
paid  under  a  mistake  of  fact."  The  court  denied  relief, 
Chief  Justice  MARSTON  saying  (p.  437) :  "  Where  a  claim  is  thus 
made  against  another  who,  not  relying  upon  the  representations 
of  the  claimant,  has  the  opportunity  to  and  does  investigate 
the  facts,  and  thereupon  becomes  satisfied  that  the  claim  made  is 
correct  and  adjusts  and  pays  the  same,  I  think  such  settlement 
and  payment  should  be  considered  as  final.  If  not,  it  is  very  diffi- 
cult to  say  when  such  disputed  questions  could  be  considered  as 
finally  settled,  or  litigation  ended.  In  the  settlement  of  dis- 
puted questions  where  both  parties  have  equal  opportunity 
and  facilities  for  ascertaining  the  facts,  it  becomes  incumbent 
on  each  of  them  to  make  his  investigation,  and  not  carelessly 
settle  trusting  to  future  investigation  to  show  a  mistake  of  fact 
and  enable  him  to  recover  back  the  amount  paid.  One  course 
encourages  carelessness  and  breeds  litigation  after  witnesses 
have  passed  beyond  the  reach  of  the  parties :  the  other  encourages 
parties  in  ascertaining  what  the  facts  and  circumstances  actually 
are  while  the  transaction  is  fresh  in  the  minds  of  all,  and  a  final 
and  peaceful  settlement  thereof."  l 

In  the  first  place  it  should  be  said  that  since  the  plaintiff 
"  employed  a  surveyor  and  they  went  upon  the  land  "  it  can- 
not fairly  be  assumed  that  he  "  carelessly  "  settled.  And  in 
the  second  place,  even  if  he  did  carelessly  settle,  since  at  the 
time  he  settled  he  had  resolved  any  previous  doubt  he  may 
have  entertained  and  fully  believed  that  he  was  under  a  duty 
to  pay  the  defendants'  claim,  the  payment  was  made,  neither 
by  way  of  compromise  of  a  dispute,  nor  without  regard  to  the 
real  facts,  but  in  misreliance  upon  a  supposed  duty  which 
turned  out  to  be  nonexistent.  Even  if  the  decision  rests 
upon  the  ground  that  the  plaintiff  was  negligent  in  failing  to 
ascertain  the  truth,  it  is  believed  to  be  unsound,  though  not 
without  the  support  of  other  cases  (ante,  §  15).  If  negligence 
is  not  imputed  to  the  plaintiff,  it  is  difficult  to  conceive  of  a 
clearer  case  of  quasi  contractual  obligation. 

1  See  also  Carlisle  v.  Barker,  1876,  57  Ala.  267 ;  Wheeler  v.  Hatheway, 
1885,  58  Mich.  77 ;  24  N.  W.  780. 

23. 


GENERAL   PRINCtyLfeS  \J    [Part  I 

§  18.  (Ill)  Misreliance  on  right  or  duty,  as  distinguished 
from  policy.  —  It  is  sometimes  said  that  money  paid  or  other 
benefits  conferred  under  a  mistake  of  fact  cannot  be  recovered 
if  the  mistake  is  as  to  a  collateral  or  extrinsic  fact.  The  words 
"  collateral  "  and  "  extrinsic,"  as  here  used,  however,  are  too 
indefinite.  What  is  generally  meant  —  and  this  seems  a  more 
illuminating  statement  of  the  rule  —  is  that  unless  the  fact 
mistaken  by  the  bestower  of  the  benefit  is  one  essential  to  the 
existence  of  his  legal  duty,  or  to  the  existence  or  enforceability 
of  his  legal  right,  there  is  no  obligation  on  the  recipient  to  make 
restitution. 

The  effect  of  this  limitation  is  to  prevent  a  recovery  by  one 
who  confers  a  benefit  under  the  inducement  of  a  mistake  of 
fact  which  affects  merely  the  policy  of  his  act.  And  the  reason 
for  denying  relief  in  such  cases  is  that  by  the  common  under- 
standing of  mankind  one  must  accept  the  responsibility  of 
determining  in  advance  whether  or  not  a  proposed  transaction 
is  to  his  advantage.  If  it  turns  out  to  his  disadvantage,  whether 
because  he  failed  accurately  to  evaluate  a  material  fact  or 
because,  consciously  or  unconsciously,  he  was  ignorant  of  a 
material  fact,  he  must  suffer  the  loss.  He  will  not  be  per- 
mitted to  withdraw  from  his  engagement,  if  unperformed ;  nor 
will  he  be  restored  to  his  original  position  if  he  has  already 
performed.  The  other  party  to  the  transaction,  it  is  true, 
may  profit  by  his  error  of  judgment  or  his  ignorance,  but  in 
the  absence  of  fraudulent  representation  or  concealment,  the 
profit  is  not  an  illegitimate  one,  and  there  is  no  obligation  to 
make  restitution. 

The  following  cases  illustrate  the  point : 

Harris  v.  Loyd,  1839, 5  Mees.  &  Wels.  432 :  Action  to  recover 
money  paid  by  the  plaintiff,  an  assignee  under  a  trust  deed  for 
the  benefit  of  creditors,  to  the  defendant,  a  sheriff,  to  release 
goods  from  an  execution  which  had  been  levied  by  the  defendant 
to  satisfy  a  judgment  against  the  plaintiff's  assignor.  After 
.  the  goods  were  released  from  the  execution  they  were  taken  from 
the  plaintiff  by  an  assignee  in  bankruptcy  appointed  because 
of  an  act  of  bankruptcy  committed  by  the  plaintiff's  assignor 

24 


Chap.  II]  MISRELIANCE   ON   RIGHT   OR   DUTY  [§  18 

before  the  assignment.  The  plaintiff  sought  to  recover  upon  the 
ground  that  he  was  induced  to  make  the  payment  by  a  mistake 
of  fact,  since  he  did  not  know,  at  the  time  of  the  payment, 
that  the  act  of  bankruptcy  had  been  committed.  Lord  ABINGER, 
C.B.  (p.  436) :  "The  short  answer,  however,  to  the  action  is 
that  the  money  was  not  paid  under  a  mistake  of  fact  [i.e. 
such  a  mistake  of  fact  as  entitles  the  plaintiff  to  relief  1,  but  upon 
a  speculation,  the  failure  of  which  cannot  entitle  the  plaintiffs 
to  recover  it  back."  ALDERSON,  B.  (p.  436) :  "This  is  money 
paid,  not  under  a  mistake,  but  under  a  bargain.  True,  it  turns 
out  to  be  a  bad  bargain ;  but  that  will  not  affect  its  validity." 

Aiken  v.  Short,  Executrix,  1856, 1  Hurl.  &  Nor.  210 :  Action 
by  a  bank  to  recover  money  paid.  The  defendant's  testator 
had  a  claim  against  one  George  Carter,  which  was  secured  by 
a  bond  and  an  equitable  mortgage  on  property  devised  to 
George  by  what  was  supposed  to  be  Edwin  Carter's  last  will. 
George  Carter  subsequently  mortgaged  the  same  property 
to  the  bank.  The  defendant  applied  to  George  Carter  for  pay- 
ment of  the  testator's  claim,  and  was  referred  to  the  bank. 
The  bank  paid  the  debt  to  get  rid  of  the  equitable  mortgage, 
but  subsequently  discovering  that  Edwin  Carter  made  a  later 
will  by  which  George  did  not  take  the  property  mortgaged, 
brought  this  action  to  recover  the  amount  paid.  BRAMWELL, 
B.  (p.  215) :  "In  order  to  entitle  a  person  to  recover  back  money 
paid  under  a  mistake  of  fact,  the  mistake  must  be  as  to  a  fact 
which,  if  true,  would  make  the  person  paying  liable  to  pay  the 
money;  not  where,  if  true,  it  would  merely  make  it  desirable 
that  he  should  pay  the  money.  It  is  impossible  to  say  that  this 
case  falls  within  the  rule." 

Buffalo  v.  O'Mattey,  1884,  61  Wis.  255;  20  N.  W.  913;  50 
Am.  Rep.  137 :  Action  to  recover  money  claimed  to  have  been 
overpaid  by  the  plaintiff  to  the  defendant  for  the  transportation 
of  tanbark.  The  terms  or  the  contract  were  that  the  defendant 
was  to  be  paid  two  dollars  per  cord  for  carrying  the  bark  to 
Duluth.  The  plaintiff  measured  the  bark  as  it  was  piled  at  the 
place  of  shipment,  found  that  there  were  sixty-three  cords, 
allowed  three  cords  for  shrinkage  and  paid  for  the  carriage  of 
sixty  cords.  The  bark  was  badly  curled,  however,  and  when 
it  reached  Duluth  it  was  so  piled  for  sale,  according  to  the 
customary  manner  of  piling  badly  curled  bark,  as  to  measure 

25 


§  18]  GENERAL  PRINCIPLES  [Part  I 

only  forty  cords.  The  plaintiff  was  ignorant  of  the  fact  that 
"  where  bark  was  curled  badly  it  was  customary  to  make  allow- 
ance for  it  in  the  measurement  when  sold ;  or  to  pile  the  bark 
tight  by  tramping  it  down  and  filling  up  the  holes."  COLE, 
C.J.  (p.  257) :  "It  is  needless  to  observe,  courts  do  not  relieve 
against  every  mistake  a  party  may  make  in  his  business  trans- 
actions. A  mistake  in  a  matter  of  fact,  to  be  the  ground  of 
relief,  must  be  of  a  material  nature,  inducing  or  influencing  the 
agreement,  or  in  some  matter  to  which  the  contract  is  to  be 
applied.  It  is  obvious  the  mistake  which  the  plaintiff  made 
was  in  supposing  that  curled  bark,  piled  in  the  loose  manner 
his  bark  was  piled,  would  hold  out  in  measure  when  piled  as 
dealers  required.  But  this  was  a  mistake  as  to  a  collateral 
fact,  which  had  nothing  to  do  with  the  contract  of  carriage. 
It  is  said  the  plaintiff  paid  for  the  carriage  upon  the  belief  that 
there  were  sixty  cords  of  it,  and  that  his  belief  was  founded  upon 
his  having  measured  the  bark  on  the  bank.  He  certainly  was 
not  mistaken  as  to  the  quantity  of  the  bark  on  the  bank,  but  was 
mistaken  in  supposing  that  a  dealer  would  take  it  at  Duluth 
piled  in  the  manner  he  had  piled  it." 

In  all  of  the  cases  above  stated  the  plaintiff  was  induced  by 
a  mistake  of  fact  to  pay  money  which  otherwise,  presumably, 
he  would  not  have  paid.  But  in  all  of  them  the  fact  mistaken 
was  one  which  affected  merely  the  policy  of  paying  the  money, 
not  his  legal  duty  to  pay  the  money  nor  his  legal  right  to  some- 
thing in  return  for  the  money.  There  are  other  cases  in  which, 
with  more  or  less  clearness,  the  same  distinction  is  taken.1 

1  Cleveland  Cliffs  Iron  Co.  v.  East  Itasca,  etc.,  Co.,  1906,  146  Fed. 
232,  237-8 ;  76  C.  C.  A.  598 ;  Brooks  v.  Hall,  1887,  36  Kan.  697 ; 
14  Pac.  236 ;  First  Nat.  Bank  v.  Burkham,  1875,  32  Mich.  328 ;  Lan- 
gevin  v.  City  of  St.  Paul,  1892,  49  Minn.  189,  196 ;  51  N.  W.  817 ;  15 
L.  R.  A.  766 ;  Southwick  v.  First  Nat.  Bank,  1881,  84  N.  Y.  420,  434 ; 
Youmans  v.  Edgerton,  1883, 91  N.  Y.  403,  411.  And  see  Holt  v.  Thomas, 
1894,  105  Cal.  273 ;  38  Pac.  891 ;  Segur  v.  Tingley,  1835,  11  Conn.  134 ; 
Lemans  v.  Wiley,  1883,  92  Ind.  436 ;  Sears  v.  Leland,  1887,  145  Mass. 
277;  14  N.  E.  Ill ;  Needles  v.  Burk,  1884,  81  Mo.  569,  573;  51  Am. 
Rep.  251;  Franklin  Bank  ».  Raymond,  1829,  3  Wend.  (N.  Y.)_69; 
Dambmann  v.  Schulting,  1878,  75  N.  Y.  55. 

In  Franklin  Bank  v.  Raymond,  supra,  where  money  was  paid  in. 
ignorance  of  a  fact  which  gave  the  payor  a  set-off,  the  court  said 
(p.  72) :  "  The  general  principle  of  law  is  indisputable,  that  if  a  party 

26 


Chap.  II]  MISRELIANCE   ON   RIGHT   OR  DUTY  [§  18 

The  Kentucky  case  of  Tucker  v.  Denton l  is  of  interest  in 
this  connection.  The  plaintiff's  parents  having  entered  into  a 
contract  for  the  sale  of  their  farm  to  the  defendants  and  having 
become  dissatisfied  with  the  transaction,  the  plaintiff  paid 
eight  hundred  dollars  to  the  defendant  for  the  release  of  her 
parents  from  their  contract.  Subsequently  the  plaintiff  dis- 
covered that  the  form  of  the  written  contract  was  such  that  it 
was  unenforceable  under  the  Statute  of  Frauds,  and  she  brought 
this  action  to  recover  the  money  paid  for  its  cancellation. 
Since  the  contract  for  the  sale  of  the  farm  was  valid  even  though 
unenforceable,  and  imposed  at  least  a  moral  obligation  upon 
the  plaintiff's  parents  so  long  as  it  remained  uncanceled,  it 
would  seem  that  the  plaintiff  received  just  what  she  paid  for, 
i.e.  the  cancellation  of  the  contract,  and  that  her  only  mistake 
was  as  to  the  worth  of  the  contract  and  consequently  as  to  the 
policy  of  paying  eight  hundred  dollars  for  its  cancellation. 
But  the  court  took  the  view  that  either  the  defendants  were 
guilty  of  fraud  in  concealing  the  unenforceability  of  the  contract 
for  the  sale  of  the  farm  or  there  was  such  a  mutual  mistake  as 
to  the  existence  of  the  fact  of  enforceability  as  to  invalidate 
the  contract  (see  post,  §  59),  and  in  either  case  the  plaintiff  was 
entitled  to  restitution. 

pays  money  under  a  mistake  of  the  real  facts,  without  any  negligence 
imputable  to  him  for  not  knowing  them,  he  may  recover  back  such 
money.  What  sort  of  facts  are  meant?  Such  facts,  I  apprehend,  as 
shew  that  the  demand  on  which  the  money  was  paid  did  not  actually 
exist  against  the  person  paying  at  the  time  the  money  was  paid." 
In  Dambmann  v.  Schulting,  supra,  the  court  said  (p.  64) :  "There  are 
many  extrinsic  facts  surrounding  every  business  transaction  which  have 
an  important  bearing  and  influence  upon  its  results.  Some  of  them  are 
generally  unknown  to  one  or  both  of  the  parties,  and  if  known,  might 
have  prevented  the  transaction.  In  such  cases,  if  a  court  of  equity 
could  intervene  and  grant  relief,  because  a  party  was  mistaken  as  to 
such  a  fact  which  would  have  prevented  him  from  entering  into  the 
transaction  if  he  had  known  the  truth,  there  would  be  such  uncertainty 
and  instability  in  contracts  as  to  lead  to  much  embarrassment.  As  to 
all  such  facts,  a  party  must  rely  upon  his  own  circumspection,  examina- 
tion and  inquiry ;  and  if  not  imposed  upon  or  defrauded,  he  must  be 
held  to  his  contracts.  In  such  cases,  equity  will  not  stretch  out  its 
arm  to  protect  those  who  suffer  for  the  want  of  vigilance.'' 
1  1907,  106  S.  W.  280  (Ky.). 

27 


§  19]  GENERAL  PRINCIPLES  [Part  I 

§  19.  (IV)  Misreliance  on  right  against  or  duty  to  third  per- 
son. —  Is  there  an  obligation  to  make  restitution  of  a  benefit 
conferred  under  the  inducement  of  a  mistake  as  to  one's  legal 
relation,  not  with  the  recipient  of  the  benefit,  but  with  a  third 
person?  In  a  few  cases,  the  question  is  answered,  apparently 
without  qualification,  in  the  negative : 

Chambers  v.  Miller,  1862,  13  C.  B.  N.  S.  125:  Action  for 
assault  and  imprisonment.  The  plaintiff  presented  a  check 
at  the  defendants'  bank,  which  defendants'  cashier  paid.  Be- 
fore the  plaintiff  left  the  bank,  it  was  discovered  that  the  account 
of  the  drawer  was  overdrawn,  whereupon  the  return  of  the  money 
was  demanded.  The  plaintiff  at  first  refused,  but  was  detained 
until  he  made  repayment.  The  defendants  justify  the  de- 
tention upon  the  ground,  inter  alia,  that  the  money  was  legally 
recoverable  from  the  plaintiff.  ERLE,  J.  (p.  133):  "The 
plaintiff  had  taken  possession  of  the  money,  counted  it  once, 
and  was  in  the  act  of  counting  it  again,  when  the  clerk,  who  had 
gone  from  the  counter,  finding  that  there  was  a  mistake,  not  as 
between  him  and  the  bearer  of  the  check,  but  as  between  him- 
and  the  customer,  returned  and  claimed  to  revoke  the  act 
of  payment  which  on  his  part  was  already  complete,  and 
claimed  to  have  the  money  back.  .  .  .  But,  as  between  the 
parties  here,  there  was  no  manner  of  mistake." 

Merchants'  Insurance  Co.  v.  Abbott,  1881,  131  Mass.  397: 
Assumpsit  for  money  had  and  received  by  the  defendants, 
Denny,  Rice  &  Co.,  under  an  insurance  policy  of  which  they 
were  assignees.  After  the  insurance  had  been  paid  it  was 
discovered  that  the  building  insured  had  been  destroyed  at 
the  instigation  of  the  original  holder  of  the  policy  before  the 
assignment.  The  defendants  knew  that  the  building  had  been 
burned,  but  were  not  aware  of  their  assignor's  fraud.  GRAY, 
C.  J.  (p.  401)  :  "The  only  contract  of  the  plaintiffs  was  with 
Abbott  [the  assignor],  and  the  only  mistake  was  between  them 
and  him.  ...  In  other  words,  the  money  was  paid  by  the 
plaintiffs  to  these  defendants,  not  as  a  sum  which  the  latter 
were  entitled  to  recover  from  the  plaintiffs,  but  as  a  sum  which 
the  plaintiffs  admitted  to  be  due  to  Abbott,  under  their  own 
contract  with  him,  and  which  at  his  request  and  in  his  behalf 
they  paid  to  these  defendants,  who  at  the  time  of  receiving  it 

28 


Chap.  II]     MISRELIANCE  ON  RIGHT  AGAINST  THIRD  PERSON     [§19 

knew  no  facts  tending  to  show  that  it  had  not  in  truth  become 
due  from  the  plaintiffs  to  Abbott.  ...  As  between  the 
plaintiffs  and  these  defendants,  there  was  no  fraud,  concealment 
or  mistake."  1 

Upon  principle  there  is  a  distinction  between  a  mistake  as 
to  legal  relations  with  a  third  person  which  affects  merely  the 
policy  of  conferring  the  benefit,  and  a  mistake  as  to  such  legal 
relations  which  affects  either  the  duty  of  conferring  the  benefit, 
or  a  right  to  be  acquired  by  conferring  it.  In  Harris  v.  Loyd, 
stated  in  the  preceding  section,  where  the  plaintiff's  mistake 
was  as  to  his  rights  under  a  deed  of  trust  from  a  third  person, 
he  was  led  by  his  mistake  to  believe  that  it  would  be  to  his 
interest  to  pay  money  to  the  defendant  for  the  release  of  cer- 
tain goods  from  execution,  but  he  was  not  led  to  believe  that 
he  was  under  a  legal  duty  to  release  the  goods  from  the  de- 
fendant's execution,  or  that  he  would  acquire  a  legal  right  by 
so  doing.  The  same  is  true  of  Aiken  v.  Short,  also  stated  in 
the  preceding  section,  where  the  plaintiff's  mistake  as  to  his 
rights  under  a  mortgage  given  to  him  by  a  third  person  induced 
him,  as  a  matter  of  policy  only,  to  pay  a  claim  of  the  defendant. 
But  in  Chambers  v.  Miller,  supra,  and  Merchants'  Insurance 
Company  v.  Abbott,  supra,  where  the  plaintiff's  mistake  was 
as  to  his  obligation  to  a  third  person  to  pay  money  to  the 
defendant,  he  was  induced  by  his  mistake  to  believe,  not 
merely  that  it  would  be  good  policy  to  pay  the  money,  but 
that  he  was  bound  to  pay  the  money.  To  say,  in  such  cases, 
that  the  money  is  paid  under  a  mistake  as  to  a  collateral  or 
extrinsic  fact,  or  a  mistake  as  to  the  payer's  legal  relation 
with  a  third  person,  is  to  beg  the  question.  The  money 
is  paid  in  misreliance  upon  a  supposed  legal  duty,  and 
not  merely  under  a  mistake  as  to  policy,  and  it  is  submitted 
that  in  the  absence  of  special  circumstances  justifying  the 

1  See  also  Southwick  ».  First  Nat.  Bank,  1881,  84  N.  Y.  420;  Ball 
v.  Shepard,  1911,  202  N.  Y.  247 ;  95  N.  E.  719,  721,  ("The  mistake  .  .  . 
must  arise  in  the  transaction  between  the  parties  to  the  action.") ; 
Johnson  v.  Boston,  etc.,  R.  Co.,  1897,  69  Vt.  521 ;  38  Atl.  267  (services). 

29 


§  20]  GENERAL  PRINCIPLES  [Part  I 

retention  of  the^benefit,  the  payor  i^  equitably  entitled  to 
restitution.1  \X 

§  20.    (V)    Circumstances   justifying   retention    of   benefit. 

retention  of  a  benefit  conferred  in  misreliance  upon  a  right 
or  duty  is  generally  inequitable.  Certain  circumstances,  how- 
ever, have  been  recognized  by  the  courts  as  justifying  a  refusal 
to  make  restitution.  Most  of  the  cases  fall  within  one  or  an- 
other of  the  following  groups : 

V"  (1)  Where  the  plaintiff  has  been  guilty  of  serious  misconduct 
toward  the  defendant. 

(2)  Where  the  plaintiff,  though  mistaken  as  to  his  legal  right 
or  duty,  was  under  a  moral  obligation  to  confer  the  benefit. 

(3)  Where  the  plaintiff  received  something  of  value  from  the 
defendant  in  exchange  for  the  benefit  conferred,  and  though 
fl,ble  to  return  the  same  in  specie  has  failed  to  do  so. 

(4)  Where,  in  consequence  of  the  mistake  and  at  the  de- 
fendant's expense,  the  plaintiff  reaped  a  benefit  equivalent  in 
Value  to  that  conferred  upon  the  defendant. 

(5)  Where  the  defendant  is  free  from  responsibility  for  the 
plaintiff's  mistake,  or  is  responsible  in  no  greater  degree  than 
the  plaintiff,  and.  has  so  changed  his  position  that  the  enforce- 
ment of  restitution  would  subject  him  to  loss. 

§  21.  (1)  Plaintiff  guilty  of  misconduct  toward  defendant.  — 
Upon  the  principle  that  finds  expression  in  the  maxim  of  equity, 
"  He  who  comes  into  equity  must  come  with  clean  hands," 
restitution  should  not  be  enforced  in  favor  of  one  who,  in  the 
course  of  the  transaction  giving  rise  to  his  claim,  was  guilty 
of  serious  misconduct  toward  the  person  from  whom  he  seeks 
to  recover.  The  point  has  been  made  against  one  who  willfully 
violates  an  enforceable  contract  or  who  refuses  to  proceed  with 
the  performance  of  a  contract  which  is  unenforceable  under 
the  Statute  of  Frauds.  The  question  will  therefore  be  con- 
sidered in  the  chapters  dealing  with  the  obligation  to  make 

1  See  McClary  v.  Michigan,  etc.,  R.  Co.,  1894,  102  Mich.  312;  60 
N.  W.  695,  in  which  a  recovery  was  allowed  for  services  rendered  under 
a  mistake  as  to  the  plaintiff's  contractual  duty  to  a  third  person. 

30 


Chap.  II]       CIRCUMSTANCES   JUSTIFYING   RETENTION  [§  22 

restitution  in  those  two  classes  of  cases  (post,  §§  93  et  seq.,  162 
et  seq.}. 

§  22.  (2)  Plaintiff  under  moral  obligation  to  confer  benefit.  — 
One  who,  while  under  a  moral  obligation  to  confer  a  certain 
benefit  upon  another,  confers  it  because  he  mistakenly  supposes 
that  he  is  under  a  legal  obligation  so  to  do,  or  because  he  mis- 
takenly supposes  that  he  will  acquire  a  legal  right  by  so  doing, 
is  not  entitled  to  restitution.  For  there  is  nothing  inequitable 
in  the  retention  of  a  benefit  to  which  the  recipient  is  morally 
entitled,  even  though  it  is  conferred  by  mistake : 

Farmer  v.  Arundle,  1772,  2  Wm.  Bl.  824 :  Action  by  the  over- 
seer of  the  parish  of  Grimley  to  recover  money  paid  to  the 
overseer  of  the  parish  of  St.  Martin's  for  the  support  of  a  pauper. 
The  plaintiff  had  certificated  the  pauper  to  the  defendant, 
but  in  this  action  contended  that  the  defendant  could  not  have 
enforced  against  the  plaintiff  a  claim  for  the  pauper's  support. 
DE  GRAY,  C. J.  (p.  825) :  "  When  money  is  paid  by  one  man  to 
another  on  a  mistake  either  of  fact  or  of  law,  or  by  deceit,  this 
action  will  certainly  lie.  But  the  proposition  is  not  universal, 
that  whenever  a  man  pays  money  which  he  is  not  bound  to  pay, 
he  may  by  this  action  recover  it  back.  Money  due  in  point 
of  honour  or  conscience,  though  a  man  is  not  compellable  to 
pay  it,  yet  if  paid,  shall  not  be  recovered  back :  as  a  bona  fide 
debt,  which  is  barred  by  the  statute  of  limitations.  Put  the 
form  of  the  certificate  out  of  the  case,  it  is  however  evidence 
at  all  events,  that  the  parish  of  Grimley  have  acknowledged 
the  pauper  to  be  their  parishioner.  And  it  is  allowed,  that  he 
has  been  maintained  four  years  by  the  parish  of  St.  Martin's. 
Admitting,  therefore,  that  this  money  could  not  have  been 
demanded  by  the  defendant  (which  it  is  not  now  necessary  to 
decide),  yet  I  am  of  opinion  that  it  is  an  honest  debt,  and  that 
the  plaintiff,  having  once  paid  it,  shall  not,  by  this  action, 
which  is  considered  as  an  equitable  action,  recover  it  back 
again." 

Pensacola,  etc.,  R.  Co.  v.  Braxton,  1894, 34  Fla.  471 ;  16  So.  317 : 
Action  for  cattle  killed  by  defendant's  engines,  etc.  The 
defendant  pleaded  as  a  set-off  that  its  agent,  by  mistake,  had 
delivered  to  the  plaintiff  a  voucher  for  $22.50  which  had  been 
intended  for  another  person  of  the  same  name.  The  plaintiff 

31 


§  22]  GENERAL  PRINCIPLES  [Part  I 

admitted  the  receipt  of  the  voucher,  but  testified  that  he  thought 
it  was  in  payment  of  a  claim  for  $25,  that  he  had  presented  for 
the  killing  of  an  ox,  which  claim  was  not  included  in  the  present 
action.  TAYLOR,  J.  (p.  481) :  "The  law  seems  to  be  settled 
that  money  paid  under  a  mistake  of  facts  cannot  be  reclaimed, 
where  the  plaintiff  has  derived  a  substantial  benefit  from  the 
payment,  nor  where  the  defendant  received  it  in  good  faith  in 
satisfaction  of  an  equitable  claim,  nor  where  it  was  due  in  honor 
and  conscience.  The  right  to  recovery  in  such  cases  turns 
upon  the  question  as  to  whether  the  party  receiving  the  money 
paid  by  mistake  can,  in  good  conscience,  retain  it.  According 
to  the  plaintiff's  evidence,  he  had  a  just  and  legal  claim  against 
the  defendant  for  an  ox  wrongfully  killed  by  it,  amounting 
to  $25,  and  of  which  he  had  notified  the  defendant,  demanding 
payment  thereof.  He  received  the  voucher  for  $22.50  without 
fraud  upon  his  part,  but  in  good  faith,  believing  it  was  his,  and 
that  it  was  given  him  in  payment  of  his  claim,  and  he  so  ap- 
propriated it.  His  claim  seems  never  to  have  been  settled 
otherwise.  Under  these  circumstances,  we  do  not  think  that 
the  retention  of  the  money  by  him,  necessarily  involved  any 
smartings  of  good  conscience."  l  Qtrcr.jfj  ~ '/ 7-0 

1  Also :  Munt  v.~  Stokes,  1792,  4  Term  R.  56Iy  (Action  to  recover 
money  paid  in  satisfaction  of  a  respondentia  bond.  The  bond  was  given 
by  the  plaintiff's  testator,  as  master  of  a  Danish  vessel,  as  security  for 
loan.  When  the  plaintiff  paid  the  money  he  did  not  know  that,  since  his 
testator  was  neither  a  natural  born  subject  nor  a  denizen  who  had  take 
the  oath  of  allegiance,  the  bond  could  not  have  been  enforced.  Jud 
ment  for  the  defendant.) ;  Platt  v.  Bromage,  1854,  24  L.  J.  Exch.  63^7 
(POLLOCK,  C.B.  (p.  65)  :  "If  a  man  has  two  creditors,  and,  intending  ' 
pay  one  he  by  mistake  pays  the  other,  he  cannot  get  the  money  back 
again.") ;  Monroe  Nat.  Bank  ».  Catlin,  1909,  82  Conn.  227 ;  73  Atl.  3  ; 
Strange  v.  Franklin,  1906,  126  Ga.  715  ;  55  S.  E.  943  ;  Illinois  Trust,  etc., 
Bank  v.  Felsenthal,  1888,  26  111.  App.  624,  (Action  to  recover  money  paid 
on  two  checks.  The  checks  were  given  to  H.  as  part  of  a  loan  on  his 
note  and  deed  of  trust.  They  were  drawn  in  favor  of  B.  and  Z.,  two 
contractors  who  were  mistakenly  supposed  to  have  claims  or  liens  on 
the  land  conveyed  by  the  deed  of  trust.  H.,  instead  of  delivering  them 
to  B.  and  Z.,  forged  their  names  as  indorsees  and  sold  the  checks  to  the 
defendants  who  collected  them.  In  fact  B.  and  Z.  had  no  claims  on  the 
land  conveyed  by  the  deed  of  trust,  so  H.  was  the  equitable  owner  of  the 
checks  and  passed  his  equitable  title  to  the  defendants.  Judgment  for 
defendants.) ;  Hubbard  v.  City  of  Hickman,  1868,  4  Bush  (67  Ky.) 
204 ;  96  Am.  Dec.  297 ;  Walker  v.  Conant,  1888,  69  Mich.  321 ;  37 

32 


Chap.  II]       CIRCUMSTANCES   JUSTIFYING   RETENTION  [§  22 

N.  W.  292 ;  13  Am.  St.  Rep.  391 ;  Foster  v.  Kirby,  1862,  31  Mo.  496, 
499,  (Action  to  recover  overpayment  on  note.  Held,  that  if  plaintiff 
"did  owe  the  amount  paid,  it  is  immaterial  that  the  note  was  for  a  less 
amount ;  if  he  paid  only  what  was  justly  due,  he  can  recover  no  part 
of  it  back.");  Ashley  v.  Jennings,  1892,  48  Mo.  App.  142,  (Action  to 
recover  $150  paid  under  the  mistaken  belief  that  two  checks  given  by 
plaintiff  to  defendant  —  one  for  $277.08  and  the  other  for  $276.90  — 
had  been  refused  payment  by  the  bank.  As  a  matter  of  fact  only  one 
of  the  checks  had  been  refused  payment.  Judgment  for  defendant.) ; 
Buel  v.  Bcughton,  1846,  2  Demo  (N.  Y.)  91,  (The  plaintiff  had  agreed 
to  make  a  note  payable  with  interest,  but  interest  was  left  out  by  mis- 
take in  drawing  it.  Supposing  the  note  to  have  been  written  with 
interest  the  plaintiff  paid  interest  on  it,  and  subsequently  discovering 
his  mistake,  sued  to  recover  the  interest  paid.  Judgment  for  the  de- 
fendant, BRONSON,  C.J.,  saying  :  ''The  plaintiff  first  omitted,  by 
mistake,  to  make  the  note  payable  with  interest,  as  he  should  have 
done;  and  then,  by  another  mistake,  he  corrected  the  first  error  by 
paying  interest,  when  the  note  itself  imposed  no  such  obligation.  And 
thus  by  two  blunders. the  parties  have  come  out  right  at  last.") ;  Jack- 
son v.  McKnight,  1879,  17  Hun  (N.  Y.  Sup.  Ct.)  2,  (Action  to  recover 
a  payment  of  interest  on  an  overdue  bond  and  mortgage.  As  a  matter  of 
fact  the-  interest  had  been  paid  before.  After  the  second  payment  but 
before  the  plaintiff's  demand  for  restitution  the  defendant  assigned  the 
mortgage.  Judgment  for  defendant,  LEARNED,  P.J.,  saying:  "The 
difficulty  is  that,  at  the  time  when  the  plaintiff  made  this  pay- 
ment, he  was  owing  the  defendant  a  much  larger  amount,  overdue  and 
payable  on  the  very  obligation  upon  which  this  payment  was  made. 
Clearly,  if  the  plaintiff  had  handed  the  defendant  $230  to  apply  on 
the  bond  and  mortgage,  he  could  not  have  recovered  that  sum  back. 
But  in  this  present  case  he  claims  to  recover,  because  it  was  intended 
as  a  payment  of  interest  which  had,  in  fact,  been  paid ;  and  not  as  a 
payment  of  principal,  which  had  not.  The  payment,  however,  was 
really  made  on  the  debt.  The  plaintiff  is,  and  always  will  be,  entitled 
to  a  credit  for  so  much  paid  thereon."  For  an  extended  criticism  of 
this  decision,  questioning  the  correctness  of  the  court's  assumption 
that  the  plaintiff  would  always  be  entitled  to  a  credit  for  the  amount 
paid,  see  Keener,  "Quasi-Contracts,"  pp.  52-8.);  cf.  Mayor,  etc.,  of 
New  York  v.  Erben,  1868,  38  N.  Y.  305 ;  s.e.  3  Abb.  App.  Dec.  255, 
(Where  an  award  was  made  to  a  property  owner  by  commissioners  ap- 
pointed to  assess  damages  and  awards  in  the  matter  of  improving  streets, 
and  by  the  mistake  of  a  clerk  the  property  owner  was  overpaid,  he  could 
not  resist  an  action  to  recover  the  overpayment  by  showing  that  the 
amount  received  by  him  was  no  more  than  fair  compensation.  The 
question  of  the  amount  of  the  award  having  been  intrusted  exclusively 
to  the  commissioners,  subject  to  appeal,  the  court  had  no  jurisdiction 
to  examine  the  question  in  this  action.) ;  Morris  v.  Tarin,  1785,  1  Dall. 
(Pa.)  147 ;  1  Am.  Dec.  233.  And  see  Alton  v.  First  Nat.  Bank,  1892, 
157  Mass.  341 ;  32  N.  E.  228 ;  18  L.  R.  A.  144 ;  34  Am.  St.  Rep.  285. 
But  see,  contra,  Sheridan  v.  Carpenter,  1872,  61  Me.  83,  (Plaintiff 

33 


§  22]  GENERAL   PRINCIPLES  [Part  I 

There  is  a  dictum  in  the  New  York  case  of  Franklin  Bank  v. 
Raymond  l  which  seems  to  carry  this  limitation  somewhat  too 
far.  The  action  was  on  a  promissory  note  and  the  defendants, 
by  way  of  set-off,  claimed  to  have  paid  another  note  by  mistake. 
It  appeared  that  the  defendants  had  given  this  last-mentioned 
note  to  one  Bailey,  who  had  sold  it  before  maturity  to  the 
Hoboken  Bank  but  had  failed,  inadvertantly,  to  indorse  it. 
The  Hoboken  Bank  had  sent  the  note  to  the  plaintiff  for  collec- 
tion and  it  had  been  paid  by  the  defendants.  Shortly  after 
paying  the  note  the  defendants  discovered  that  it  had  not  been 
indorsed  by  Bailey  to  the  Hoboken  Bank  and  consequently 
that  a  claim  which  they  had  against  Bailey  might  have  been 
set  off  against  the  note  in  the  hands  of  the  holder.  They  im- 
mediately demanded  the  return  of  the  money  paid  to  the 
plaintiff,  which  refused  to  refund  and  credited  the  Hoboken 
Bank  with  the  collection.  The  court  properly  refused  to  allow 
the  defendants'  claim,  for  since  the  failure  to  indorse  the  note 
was  inadvertant  the  defendant  was  morally  bound  not  to  insist 
upon  his  set-off  against  the  purchaser  and  it  was  therefore  not 
against  conscience  for  the  purchaser  or  its  agent  to  retain  the 
money.  But  in  the  course  of  its  opinion,  the  court  said :  "  The 
debt  paid  by  the  defendants  was  one  that  subsisted  against 
them  at  the  time  of  payment.  The  fact  of  which  they  were 
ignorant,  did  not  shew  that  there  was  no  debt  existing  at  the 
time;  it  only  shewed  that  they  were  in  a  situation  which 
enabled  them  to  set  off  against  the  demand  they  had  paid, 
a  demand  due  to  them  from  Bailey.  I  do  not  find  any  case 

was  payee  of  a  note  supposed  to  be  the  note  of  St.  Paul's  parish.  He 
sold  it  as  such  to  defendant  and  was  subsequently  obliged  to  pay  it  as 
indorser.  After  payment  plaintiff  discovered  that  the  note  was  origin- 
ally so  drawn  as  to  be  the  personal  note  of  the  treasurer  of  the  parish 
and  had  been  altered  so  as  to  appear  to  be  a  parish  note  after  its  pur- 
chase by  defendant.  Plaintiff  then  brought  this  action  to  recover  the 
money  paid  to  defendant  and  was  allowed  to  recover,  notwithstanding 
the  fact  that  after  its  alteration  the  note  was  what  he  supposed  it  to  be 
when  he  took  it  and  when  he  sold  it  to  defendant,  and  what  defendant 
supposed  he  was  buying.  See  criticism  of  this  decision,  Keener, 
"  Quasi-Contracts,"  pp.  47-9.). 
1  1829,  3  Wend.  (N.  Y.)  69,  73. 

34 


Chap.  II]         CIRCUMSTANCES   JUSTIFYING   RETENTION  [§  23 

where  money  paid  on  a  subsisting  demand  has  been  recovered 
back  on  the  ground  that  the  person  making  the  payment  had 
subsequently  discovered  facts  that  shew  he  had  a  set-off  against 
the  demand." 

Apparently  the  attention  of  the  court  had  not  been  called 
to  the  case  of  Bize  v.  Dickason,1  in  which  Lord  MANSFIELD  per- 
mitted the  recovery  of  money  paid  to  an  assignee  in  bank- 
ruptcy by  one  who  had  a  claim  against  the  bankrupt  which 
might  have  been  set  off  against  the  assignee's  demand.  In  the 
latter  case,  it  is  true,  the  plaintiff's  mistake  was  one  of  law,  and 
for  that  reason  relief  would  now,  in  most  jurisdictions,  be  denied. 
But  Lord  MANSFIELD  was  clearly  right  in  his  conclusion  that  as 
between  a  debtor  and  his  creditor,  or  one  standing  in  the  shoes 
of  his  creditor,  the  former  is  under  no  moral  obligation  to  pay 
more  than  the  balance  due  after  deducting  any  set-off  that  he 
may  have,  and  consequently,  if,  by  mistake,  he  pays  an  amount 
in  excess  of  such  balance,  its  retention  by  the  creditor  is  against 
conscience.2 

§  23.  (3)  Plaintiff's  failure  to  place  defendant  in  statu  quo.  — 
If,  in  exchange  for  the  benefit  conferred  upon  the  defendant, 
the  defendant  gives  something  of  value  to  the  plaintiff  which 
the  plaintiff,  when  he  discovers  his  mistake,  is  able  to  return 
in  specie,  it  is  not  against  conscience  for  the  defendant  to  retain 
the  benefit  received  by  him  until  such  restitution  is  made : 

Levy  v.  Terwilliger,  1881, 10  Daly  (N.  Y.  C.  P.)  194 :  Action  to 
recover  $150  paid  by  the  plaintiff's  agent  to  the  defendant  for 
a  safe  which  the  agent  mistakenly  supposed  the  plaintiff  had 
agreed  to  buy  from  the  defendant.  As  a  matter  of  fact  the 
plaintiff  had  agreed  to  buy  a  safe  from  another  dealer  of  the 

1  1786,  1  Term  R.  285. 

2  See  Keener,  "Quasi-Contracts,"  p.  51 :  "As  between  the  debtor  and 
the  original  creditor  the  difference  in  amount  between  the  two  debts 
represents  what  in  conscience  should  be  paid  by  the  one  to  the  other. 
And  the  fact  that  in  our  system  of  law  one  claim  does  not  extinguish 
the  other,  and  must  be  pleaded,  not  as  payment,  but  by  way  of  set-off 
or  counter-claim,  does  not  prove  that  a  creditor  receiving  in  such  circum- 
stances, not  the  amount  of  his  debt  less  the  set-off,  but  the  entire  amount 
of  his  claim,  has  not  in  conscience  received  more  than  he  should  keep." 

35 


§  23]  GENERAL  PRINCIPLES  [Part  I 

same  name.  The  defendant,  misled  by  the  action  of  the  plain- 
tiff's agent,  had  shipped  a  safe  to  the  plaintiff.  C.  P.  DALY, 
C.J.  (p.  199) :  "It  certainly  is  not  against  conscience  that  the 
defendant  should,  in  this  case,  retain  the  price  paid  to  him  after 
having  parted  with  the  safe,  when  the  plaintiff,  through  whose 
act  and  negligence  it  was  shipped,  has  never  made  any  effort 
to  get  it  from  the  vessel  and  restore  it  to  the  defendant,  but 
without  doing  or  offering  to  do  anything  to  repair  what  he  him- 
self brought  about,  asks  the  court  to  compel  the  defendant  to 
restore  to  him  the  $150."  : 

If  that  which  the  plaintiff  receives  from  the  defendant  is  of 
no  value  or  advantage  to  the  defendant  whatever,  its  return 
is  unnecessary.2  But  it  has  been  held  that  a  grantee  who  would 
recover  money  paid  for  a  conveyance  of  land  under  a  mistake 
as  to  the  grantor's  title  must  tender  a  reconveyance,  since  other- 
wise any  title  that  the  grantor  might  subsequently  acquire 
would  vest  in  the  grantee,3  and  likewise  that  one  who  would 
recover  land  exchanged  for  mining  stock  must  return  the  cer- 
tificates of  stock,  if  genuine,  although  the  stock  is  of  no  intrinsic 
or  market  value.4 

What  if  the  benefit  received  by  the  plaintiff  cannot  be 
restored  to  the  defendant  in  specie  f  Suppose,  for  instance, 
that  the  benefit  consists  of  goods  which  the  plaintiff  sells  or 
consumes  before  he  learns  of  his  mistake.  Or,  suppose  that 
the  benefit  consists  of  services  rendered — something  which  can- 

1  Also :   Lemans  v.  Wiley,  1883,  92  Ind.  436,  441,  ("This  note  is  not 
shown  to  have  been  a  worthless  thing,  and  we  know  of  no  rule  of  law  or 
equity  which  will  sanction  her  holding  it,  and  recovering  of  appellant 
what  she  paid  for  it.") ;    Coolidge  v.  Bingham,  1840,  1  Met.  (Mass.) 
547,  (a  genuine  note  with  forged  indorsements) ;    Northampton  Nat. 
Bank  v.  Smith,  1897,  169  Mass.  281 ;  47  N.  E.  1009 ;  61  Am.  St.  Rep. 
283,  (check  which  bank  had  been  instructed  not  to  pay). 

2  Kent  v.  Bornstein,  1866,  12  Allen  (Mass.)  342,  (counterfeit  bill) ; 
Brewster  v.  Burnett,  1878,  125  Mass.  68 ;  28  Am.  Rep.  203,  (counterfeit 
U.  S.  bonds) ;  Martin  v.  Home  Bank,  1899,  160  N.  Y.  190 ;  54  N.  E. 
717 ;   off.  30  App.  Div.  498 ;  52  N.  Y.  Supp.  464,  (valueless  check) ; 
Paul  v.  City  of  Kenosha,  1867,  22  Wis.  266 ;  94  Am.  Dec.  598,  (void 
bond  issued  by  defendant). 

3  Moyer  v.  Shoemaker,  1849,  5  Barb.  (N.  Y.  Sup.  Ct.)  319,  322. 
*  Bassett  v.  Brown,  1870,  105  Mass.  551. 

36 


Chap.  II]  CIRCUMSTANCES   JUSTIFYING   RETENTION  [§  24 

not  be  restored  in  specie  under  any  circumstances.  It  is  only 
fair,  in  such  cases,  to  allow  the  plaintiff  to  recover  to  the 
extent  that  the  benefit  received  by  the  defendant  exceeds  in 
value  that  received  by  the  plaintiff.  Such  is  the  law,1  though 
where  the  action  for  restitution  is  employed  not  to  recover 
benefits  conferred  by  mistake  but  as  an  alternative  remedy  for 
the  breach  of  a  contract,  it  is  held,  by  the  weight  of  authority, 
that  if  the  plaintiff  cannot  place  the  defendant  in  statu  quo  he 
cannot  recover  (post,  §  265). 

§  24.  (4)  Plaintiff's  receipt  of  equivalent  benefit.  —  If  the 
plaintiff,  not  by  way  of  exchange,  yet  in  consequence  of  the  mis- 
take and  at  the  defendant's  expense,  reaps  a  benefit  equivalent 
in  value  to  that  conferred  upon  the  defendant,  restitution 
should  not  be  enforced.  This  is  exemplified  in  the  case  of 
Kingston  Bank  v.  Eltinge*  which  was  an  action  to  recover  money 
paid  by  a  sheriff,  with  the  plaintiff's  consent,  to  the  defendant. 
The  plaintiff  and  the  defendant  both  had  judgments  against 
one  Elmendorf,  execution  had  issued  on  both  judgments,  and 
certain  property  had  been  sold.  The  plaintiff  consented  to 
the  payment  of  the  proceeds  of  the  sale  to  the  defendant  in 
the  belief  that  the  sale  had  been  under  the  defendant's  execu- 
tion, whereas  in  fact  the  defendant's  execution  had  expired  and 
the  sale  had  been  under  the  plaintiff's.  But  it  further  appeared 

1  Day  v.  New  York,  etc.,  R.  Co.,  1873,  51  N.  Y.  583,  (Plaintiff  had 
been  given  business  of  feeding  and  keeping  stock  transported  by  defend- 
ant, in  consideration  of  conveyance  of  land,  and  building  of  cattle  pens, 
etc.     The  contract  was  unenforceable  under  the  Statute  of  Frauds ; 
defendant  defaulted ;    this  action  was  to  recover  benefit  derived  by 
defendant  from  plaintiff's   performance.      Said    the    court   (p.   592) : 
"It  was  not  necessary  for  the  plaintiff  to  tender  the  profits  to  the  de- 
fendant before  the  commencement  of  the  action.     They  were  part  of  the 
consideration  received  by  him  for  his  conveyance,  and  he  has  the  same 
right  to  hold  them  as  if  so  much  money  had  been  paid  to  him  by  the 
defendant.     His  claim  is  against  the  defendant  for  the  balance,  if  any, 
of  the  value  of  the  land.") ;  Lawton  v.  Howe,  1861,  14  Wis.  241,  (Plain- 
tiff had  received  void  school  land  certificates  which  he  had  surrendered 
to  the  commissioners  for  cancellation.).      For  additional  cases  see  posf, 
§  106. 

2  1876,  66  N.  Y.  625,  627.     See  also  Dickey  County  v.  Hicks,  1905, 
14  N.  D.  73 ;   103  N.  W.  423  ;  De  Pauw  Plate  Glass  Co  v.  City  of  Alex- 
andria, 1898,  152  Ind.  443 ;  52  N.  E.  608. 

37 


§  25]  GENERAL  PRINCIPLES  [Part  I 

that  the  defendant,  upon  receipt  of  the  money  so  paid,  had 
canceled  his  judgment,  which  had  been  a  prior  lien  on  Elmen- 
dorf 's  real  estate,  and  the  plaintiff  had  subsequently  realized  from 
a  sale  of  the  real  estate  so  released  a  sum  at  least  equivalent  to 
that  paid  under  mistake  to  the  defendant.  Under  these  circum- 
stances it  was  properly  held  that,  "as  the  plaintiff  was  not  en- 
titled to  recover  unless  it  was  against  conscience  for  defendant 
to  retain  the  money,  and  as  defendant  received  no  more  than 
his  due  and  thereupon  relinquished  a  lien  from  which  plaintiff  de- 
rived full  as  much  benefit  as  if  it  had  itself  received  the  money, 
plaintiff,  on  this  ground  alone,  was  not  entitled  to  recover." 

If  the  benefit  received  by  the  plaintiff  as  a  result  of  his 
mistake  is  less  in  value  than  that  conferred  upon  the  defend- 
ant, restitution  should  be  enforced,  of  course,  to  the  extent 
of  the  difference. 

§  25.  (5)  Change  of  position  by  defendant.  —  Ordinarily, 
by  restoring  a  benefit  conferred  in  misreliance  upon  a  right  or 
duty,  one  merely  places  himself  in  the  position  where  he  would 
have  been  if  the  mistake  had  not  been  made.  In  other  words 
restitution  ordinarily  entails  no  loss  to  the  defendant.  But 
what  if  the  defendant,  because  of  the  receipt  of  the  benefit 
and  before  learning  of  the  plaintiff's  mistake,  gives  up  property, 
surrenders  a  right  against  a  third  person,  or  otherwise  so  acts  — 
so  "  changes  his  position,"  as  the  courts  usually  put  it  —  that 
restitution  will  not  place  him  wrhere  he  would  have  been  if 
the  mistake  had  not  been  made  but  will  subject  him  to  positive 
loss  ?  The  answer  to  this  question  depends  upon  the  responsi- 
bility for  the  plaintiff's  mistake : 

1.  If  the  mistake  is  attributable  solely  or  chiefly  to  some  negli- 
gent act  or  omission  of  the  defendant  or  his  agent,  it  is  but  just 
that  the  defendant  rather  than  the  plaintiff  should  suffer  a  loss. 
Restitution,  therefore,  should  be  enforced. 

Cases  of  this  class  are  comparatively  infrequent,  but  in  all 
that  have  been  found  relief  has  been  granted.1 

2.  If  responsibility  for  the  mistake  cannot  fairly  be  laid  at  the 

1  Union  Bank  v.  U.  S.  Bank,  1807,  3  Mass.  74 ;  Koontz  v.  Central 
Nat.  Bank,  1873,  51  Mo.  275,  (Plaintiff  paid  draft  under  impression  that 

38 


Chap.  II]         CHANGE   OF   POSITION   BY   DEFENDANT  [§  25 

defendant's  door,  or  if  his  fault  is  no  greater  than  the  plaintiff's, 
the  retention  of  the  benefit  by  the  defendant  is  not  against  con- 
science. To  refuse  to  enforce  restitution,  it  is  true,  is  to  subject 
the  plaintiff  to  a  loss ;  but  justice  would  not  be  served  by  shift- 
ing the  loss  to  the  shoulders  of  a  defendant  who  is  either  less  at 
fault  than  the  plaintiff,  or  at  least  no  more  blameful,  and  who,  but 
for  the  plaintiff's  mistake,  would  not  have  changed  his  position. 
Where  it  appears  that  the  plaintiff  alone  was  negligent,  or 
that  his  fault  was  greater  than  the  defendant's,  this  doctrine 
is  accepted  without  question.1  Where  it  appears  that  neither 

she  was  the  drawee.  The  draft  was  in  reality  against  another  person 
and  was  presented  to  the  plaintiff  by  the  mistake  of  defendant.  Not- 
withstanding the  fact  that  defendant  had  paid  over  the  money  to  its 
principal  and  the  further  fact  that  the  drawee  had  become  insolvent, 
plaintiff  was  allowed  to  recover.  The  decision  was  not  rested,  however, 
upon  the  ground  that  the  mistake  was  caused  by  defendant's  negli- 
gence.) ;  Phetteplace  v.  Bucklin,  1893,  18  R.  I.  297;  27  Atl.  211,  (Pay- 
ment of  lapsed  legacy  to  personal  representative  of  legatee  who  dis- 
tributed the  money  according  to  the  legatee's  will.  MATTESON,  C.J. : 
''When  a  person  pays  money  in  ignorance  of  circumstances  with 
which  the  receiver  is  acquainted,  and  which  if  disclosed  would  have 
prevented  the  payment,  the  parties  do  not  deal  on  equal  terms  and  the 
money  is  held  to  be  unfairly  obtained  and  may  be  recovered.  The 
testimony  on  the  part  of  the  defendant  does  not  negative  such  a  state 
of  facts,  and  certainly,  if  such  a  state  of  facts  existed,  it  would  not  be 
inequitable  to  permit  the  plaintiff  to  recover,  even  if  the  defendant  had 
paid  the  money  to  others  before  demand  for  its  repayment.") ;  Met- 
calf  v.  Benson,  1874,  4  Baxt.  (63  Tenn.)  565,  (Plaintiff  overpaid  to 
defendants  a  judgment  obtained  against  him  in  favor  of  defendants' 
client,  the  mistake  being  the  result  of  the  defendants'  failure  to  inform 
plaintiff  of  a  payment  previously  made  upon  the  judgment  by  one  who 
was  indebted  to  plaintiff.  Notwithstanding  the  fact  that  the  defend- 
ants had  remitted  the  money  to  their  client,  it  was  held  that  they  must 
make  restitution.).  See  Newall  v.  Tomlinson,  1871,  L.  R.  6  C.  P.  405, 
(Plaintiffs  overpaid  defendants  for  cotton,  the  mistake  being  the  result 
of  an  erroneous  computation  of  weight  by  defendants'  clerk.  Defend- 
ants settled  with  their  principals  before  the  mistake  was  discovered,  but 
a  recovery  was  allowed.  BOVILL,  C.J. :  "The  mistake  originated 
with  the  defendants  themselves,  and  they  alone  are  responsible." 
The  decision  rests  mainly,  however,  upon  other  grounds.) ;  Clark  v. 
Eckroyd,  1886,  12  Ont.  App.  Rep.  425.  See  also  cases  of  payment  of  a 
forged  bill  to  one  who  should  have  discovered  the  forgery,  post,  §  92. 

1  German  Security  Bank  v.  Columbia,  etc.,  Trust  Co.,  1905,  27  Ky. 
Law  Rep.  581 ;  85  S.  W.  761,  (Defendant  lost  right  against  indorsers  by 
running  of  statute  of  limitations.) ;  Pelletier  v.  State  Nat.  Bank,  1906, 

39 


§  25]  GENERAL  PRINCIPLES  [Part  I 

party  was  negligent,  or  that  they  were  equally  negligent,  resti- 
tution has  in  a  few  cases  been  enforced ; :  but  there  is  reason 
to  hope  that  these  cases  will  not  be  followed,2  and  they  are 

117  La.  335 ;  41  So.  640,  (Wife  paid  debt  of  husband  to  prevent  sale  of 
seized  property  under  mistaken  impression  that  it  belonged  to  her : 
as  a  result  of  payment,  the  defendant  lost  the  benefit  of  the  seizure  and 
had  its  writ  returned.) ;  Wilson  v.  Barker,  1862,  50  Me.  447,  (Defendant 
discharged  a  mortgage.);  Walker  v.  Conant,  1887,  65  Mich.  194;  31 
N.  W.  786;  1888,  69  Mich.  321 ;  37  N.  W.  292;  13  Am.  St.  Rep.  391, 
(Money  paid  on  forged  note  and  mortgage ;  defendant  lost  her  note  and 
mortgage  and  "therefore  lost  the  power  that  the  possession  of  these 
papers  might  have  given  her  in  the  collection  of  her  debt."  But  see 
dissenting  opinion,  69  Mich.  329.) ;  Continental  Nat.  Bank  v.  Trades- 
men's Bank,  1903,  173  N.  Y.  272;  65  N.  E.  1108,  (Plaintiff  negligently- 
certified  and  paid  a  raised  draft ;  defendant  paid  money  over  to  deposi- 
tor.) ;  Fegan  v.  Great  Northern  R.  Co.,  1899,  9  N.  D.  30 ;  81  N.  W.  39, 
(Plaintiff,  a  station  agent,  paid  money  to  make  good  a  defalcation  mis- 
takenly supposed  to  have  occurred  during  his  administration ;  as  a 
result  of  payment,  defendant  lost  right  of  indemnity  on  bond  of  his 
predecessor.) ;  Atlantic  Coast  Line  R.  Co.  v.  Schirmer,  1910,  87  S.  C. 
309 ;  69  S.  E.  439,  (Plaintiff  paid  claim  for  loss  of  goods  shipped  by  de- 
fendant, and  later  discovered  that  goods  had  been  delivered  to  con- 
signee. Consignee  had  quit  business  and  disappeared,  so  defendant 
could  not  collect  from  him.);  Richey  v.  Clark,  1895,  11  Utah  467; 
40  Pac.  717,  (Defendant  lost  rights  against  third  person.).  And  see 
Deutsche  Bank  v.  Beriro  and  Co.,  1895,  73  L.  T.  R.  669 ;  Maher  v. 
Millers,  1878,  61  Ga.  556 ;  34  Am.  Rep.  104 ;  Guild  v.  Baldridge,  1852, 
2  Swan  (32  Tenn.)  294,  303. 

1  Durrant  v.  Ecclesiastical  Commrs.,  1880,  6  Q.  B.  D.  234,  (Plaintiff, 
by  mistake,  paid  tithe  rent  .in  respect  of  land  not  in  his  occupation. 
The  mistake  was  not  discovered  for  two  years  and  the  defendants  con- 
sequently lost  their  remedy  against  the  lands  actually  chargeable.) ; 
Kingston  Bank  v.  Eltinge,  1869,  40  N.  Y.  391 ;   100  Am.  Dec  516,  (As  a 
consequence  of  a  payment  under  mistake  the  defendant  had  canceled 
a  judgment  and  thereby  lost  a  security.).     See  Koontz  v.  Central  Nat. 
Bank,  1873,  51  Mo.  275,  (Both  parties  appear  to  have  been  negligent, 
but  the  defendant  perhaps  in  greater  degree  than  the  plaintiff.) ;  Corn 
Exchange  Bank  v.  Nassau  Bank,  1883,  91   N.  Y.  74;  43  Am.  Rep. 
655 ;  Clark  v.  Eekroyd,  1886,  12  Ont.  App.  Rep.  425,  (Defendants  mis- 
directed goods  shipped  to  plaintiffs  and  they  were  sold  by  the  carrier 
to  pay  charges.     Plaintiffs,  by  mistake,  paid  for  goods.     The  parties 
appear  to  have  been  about  equally  at  fault,  but  the  court  intimates  that 
the  defendants'  fault  was  the  greater.) ;  Bank  of  Toronto  v.  Hamilton, 
1898,  28  Ont.  51 ;  Phetteplace  v,  Bucklin,  1893,  18  R.  I.  297 ;  27  Atl. 
211. 

2  Durrant  v.  Ecclesiastical  Commrs.,  supra,  has  been  criticized  as 
inconsistent  with  earlier  English  cases.  See  Keener,  "  Quasi-Contracts," 

40 


Chap.  II]  CHANGE   OF   POSITION   BY   DEPENDANT  [§  23 

already  at  least  equalled  in  number  by  the  cases  which  deny 
relief.1 

§  26.  (a)  Change  of  position  must  be  irrevocable.  —  It 
should  be  emphasized  that  change  of  position  alone  is  not 
a  defense  —  the  change  must  be  irrevocable.  This  point, 
which  appears  in  some  decisions  to  have  been  overlooked, 
is  brought  out  with  great  clearness  in  a  Rhode  Island 
case: 


pp.  66,  67 ;  Costigan,  "Change  of  Position  as  a  Defense,"  20  Harv.  Law 
Rev.  205,  216.  Kingston  Bank  v.  Eltinge,  supra,  has  also  been  criticized 
by  Prof essor  Keener  ("  Quasi-Contracts,"  pp.  67-70) ;  and  Professor  Cos- 
tigan declares  (20  Harv.  Law  Rev.  215,  n.  4)  that  the  later  New  York 
cases  "are  not  unfriendly  to  a  change,"  citing  Continental  Nat.  Bank  v. 
Tradesmen's  Bank,  1903,  173  N.  Y.  272,  [65  N.  E.  1108],  and  Nat. 
Park  Bank  v.  Seaboard  Bank,  1889,  114  N.  Y.  28,  [20  N.  E.  632 ;  11  Am. 
St.  Rep.  612],  to  which  may  be  added,  Hathaway  v.  County  of  Dela- 
ware, 1906,  185  N.  Y.  368;  78  N.  E.  153;  13  L.  R.  A.  (N.  S.)  273; 
113  Am.  St.  Rep.  909;  and  BaU  v.  Shepard,  1911,  202  N.  Y.  247;  95 
N.  E.  719.  It  should  also  be  noted  that  upon  an  appeal  from  a  second 
trial  of  Kingston  Bank  v.  Eltinge,  it  having  appeared  that  not  only 
had  the  defendant  relinquished  a  lien  but  such  relinquishment  had 
resulted  in  a  benefit  to  the  plaintiff  as  great  as  that  received  by  the  defend- 
ant, the  right  to  restitution  was  denied.  Kingston  Bank  v.  Eltinge, 
1876,  66  N.  Y.  625. 

1  Crocker- Woolworth  Bank  v.  Nevada  Bank,  1903,  139  Cal.  564 ; 
73  Pac.  456 ;  63  L.  R.  A.  245 ;  96  Am.  St.  Rep.  169,  (Plaintiff  paid  a 
raised  check  on  an  indorsement  so  restricted  that  the  defendant  was 
held  not  liable  as  a  general  indorser  or  as  representing  that  it  was 
genuine.  Defendant,  before  learning  of  the  error,  paid  the  money 
over  to  its  customer.  HENSHAW,  J. :  "The  governing  principle  is 
this :  that  where  equally  innocent  persons  have  dealt  with  one  an- 
other under  a  mistake,  the  burden  of  loss  resulting  from  the  common 
error  ordinarily  will  be  left  where  the  parties  themselves  have  placed 
it,  and  so  a  recovery  can  only  be  had  where  in  equity  and  good  con- 
science the  defendant  should  be  called  upon  to  refund.") ;  Behring  v. 
SomerviUe,  1899,  63  N.  J.  L.  568 ;  44  Atl.  641 ;  49  L.  R.  A.  578,  (Money 
paid  to  second  mortgagee  instead  of  first ;  defendant  surrendered  his 
assignment  and  lost  his  legal  hold  upon  the  bond  and  mortgage  as 
security  for  his  claim  against  the  assignor.  See  criticism  of  this  case, 
13  Harv.  Law  Rev.  530.) ;  Union  Bank  of  Lower  Canada  v.  Ontario 
Bank,  1880,  24  Lower  Can.  Jur.  309 ;  Boas  v.  Updegrove,  1847,  5  Pa. 
St.  516;  47  Am.  Dec.  425,  (Terre-tenant  paid  judgment  mistakenly 
supposed  to  be  lien  on  land ;  as  a  result,  judgment  discharged.)  See 
Citizens  Bank  v.  Rudisill,  1908,  4  Ga.  App.  37;  60  S.  E.  818;  Peusa- 
cola,  etc.,  R.  Co.  v.  Braxton,  1894,  34  Fla.  471 ;  16  So.  317. 

41 


§  27]  GENERAL  PRINCIPLES  [Part  I 

Phetteplace  v.  Bucklin,  1893,  18  R.  I.  297;  27  Atl.  211: 
The  surety  on  an  executor's  bond,  after  the  malversation  and 
insolvency  of  his  principal,  paid  the  representatives  of  a  legatee 
who,  without  leaving  lineal  descendants,  predeceased  the 
testator,  and  whose  legacy  had  thus  lapsed,  the  death  of  the 
legatee  being  unknown  to  the  surety.  The  representative  of 
the  legatee  distributed  the  money  according  to  the  legatee's 
will,  after  which  the  surety  brought  action  against  him  to 
recover  the  amount  paid.  The  defendant  contended  that 
since  he  had  paid  over  the  money,  the  enforcement  of  restitu- 
tion would  be  inequitable,  but  the  court  said  (p.  301):  "It 
is  possible  that  a  simple  request  to  the  legatees,  accompanied 
by  a  statement  of  the  facts  showing  the  injustice  of  their  re- 
tention of  the  money,  would  result  in  their  returning  it  to  be 
restored  to  the  plaintiff.  Until  all  reasonable  efforts  have  been 
made  by  the  defendant  to  get  back  the  money  and  have  proved 
unavailing,  how  can  it  be  said  that  it  would  be  inequitable  to 
permit  a  recovery  ?  "  * 

§  27.  (b)  Payment  over  or  settlement  with  principal  as  a 
defense  to  agent.  —  The  rule  is  established  that  money  paid  to 
an  agent  by  mistake  may  not  be  recovered  from  him  if,  before 
learning  of  the  mistake,  he  pays  it  over  to  his  principal.2  That 
this  is  thought  to  rest  upon  the  ground  of  an  irrevocable  change 
of  position  by  the  agent  is  indicated  by  the  existence  of  a  cor- 
relative rule  that  payment  over  to  his  principal  after  notice 
of  the  plaintiff's  claim  for  its  return  is  no  defense.3  But  if  the 

1  See  also  Lawrence  v.  American  Nat.  Bank,  1873,  54  N.  Y.  432,  436, 
(The  defendant  had  discharged  sureties  but  was  nevertheless  required 
to  make  restitution.     The  court  said  that  the  defendant  could  avoid 
its  discharge  of  sureties  on  the  ground  of  mistake  and  resort  to  them  for 
so  much  as  it  was  compelled  to  pay  the  plaintiff.     "Hence  it  is  not  clear 
that  the  defendant  will  suffer  any  damage  on  account  of  plaintiff's 
mistake."). 

2  Holland  v.  Russell,  1861,  1  Best  &  Sm.  424,  aff.  4  Best  &  Sm.  14; 
Shand  v.  Grant,  1863,  15  C.  B.  N.  S.  324 ;  Hooper  v.  Robinson,  1878,  98 
U.  S.  528 ;    Yarborough  v.  Wise,  1843,  5  Ala.  292 ;    Maher  v.  Millers, 
1878,  61  Ga.  556 ;   34  Am.  Rep.  104 ;    Granger  v.  Hathaway,  1869,  17 
Mich.  500.     See  Martin  v.  Allen,  1907, 125  Mo.  App.  636 ;  103  S.  W.  138. 

*  Buller  v.  Harrison,  1777,  Cowp.  565 ;  Griffith  v.  Johnson's  Admr., 
1837,  2  Harr.  (Del.)  177 ;  Law  v.  Nunn,  1847,  3  Ga.  90,  93 ;  McDonald 

42 


Chap.  II]       SETTLEMENT  WITH   PRINCIPAL   AS   DEFENSE        [§  27 

agent's  defense  is  really  that  of  irrevocable  change  of  position, 
why  should  he  not  be  required  to  prove  not  only  a  payment 
over  to  his  principal,  but  his  inability,  because  of  the  princi- 
pal's insolvency  or  for  some  other  reason,  to  obtain  reimburse- 
ment? A  better  reason  for  denying  relief  against  the  agent 
would  seem  to  be  that  since  a  payment  to  an  agent  is  in  legal 
contemplation  a  payment  to  his  principal,  it  is  the  principal 
and  not  the  agent  who  benefits  by  the  mistake.  And  if  this 
be  true,  the  agent  certainly  does  no  wrong  in  putting  his  prin- 
cipal into  possession  of  the  money  even  after  the  receipt  of 
notice  that  a  claim  for  restitution,  equitable  in  its  nature,  has 
been  made. 

As  a  logical  consequence  of  the  distinction  made  by  the  courts 
between  payment  over  before  notice  and  payment  over  after 
notice,  it  is  held  that  the  mere  act  of  crediting  the  amount 
received  upon  the  principal  account,  before  notice,  will  not 
protect  the  agent,  for  the  account  may  easily  be  corrected,1 
but  the  crediting  of  the  amount  to  the  principal,  followed  by 
a  settlement  of  accounts  between  the  principal  and  agent, 
before  notice,  is  a  defense,  for  such  a  settlement  is  equivalent 
to  payment.2 

To  the  rule  that  payment  over  by  an  agent  before  notice  of 
the  mistake  is  a  defense,  the  case  of  a  defendant  agent  who 
purports  to  deal  as  principal  is  said  to  constitute  an  exception.3 
The  reason  for  this  exception  is  said  by  Professor  Keener  to  be 

v.  Napier,  1853,  14  Ga.  89,  96 ;  Garland  v.  Salem  Bank,  1812,  9  Mass. 
408;  6  Am.  Dec.  86;  Jefts  v.  York,  1852,  10  Gush.  (Mass.)  392,  396; 
O'Connor  v.  Clopton,  1882,  60  Miss.  349;  Hearsey  v.  Pruyn,  1810, 
7  Johns.  (N.  Y.)  179.  See  Elliott  v.  Swartwout,  1836,  10  Pet.  (U.  S.) 
137,  154;  Mowatt  v.  McLelan,  1828,  1  Wend.  (N.  Y.)  173. 

1  Buller   v.    Harrison,    1777,    Cowp.   565 ;     Cox   v.   Prentice,    1815, 
3  Maule  &  Sel.  344;    Kerrison  v.  Glyn,  Mills,  Currie  &  Co.,  1909, 
26  T.  L.  R.  37 ;    Deisch  v.  Wooten-Agee  Co.,  1910,  95  Ark.  279 ;    129 
S.  W.  819 ;   LaFarge  v.  Kneeland,  1827,  7  Cow.  (N.  Y.)  455. 

2  Holland  v.  Russell,  1861,  1  Best  &  Sm.  424,  434,  aff.  1863,  4  Best  & 
Sm.  14;  Mowatt  ».  McLelan,  1828,  1  Wend.  (N.  Y.)  173. 

3Newall  v.  Tomlinson,  1871,  L.  R.  6  C.  P.  405;  United  States  ». 
Pinover,  1880,  3  Fed.  305 ;  Smith  v.  Kelley,  1880,  43  Mich.  390 ;  5  N. 
W.  437;  Canal  Bank  v.  Bank  of  Albany,  1841,  1  Hill  (N.  Y.)  287; 
Merchants'  Bank  v.  Mclntyre,  1849,  2  Sandf.  (N.  Y.  Superior  Ct.)  431. 

43 


§  28]  GENERAL  PRINCIPLES  [Part  I 

that  the  agent  who  has  dealt  as  a  principal  cannot  claim  "  that 
in  paying  the  money  over  to  a  party,  who  in  fact  sustained  the 
relation  of  principal  to  him,  he  had  paid  the  money  to  the  person 
to  whom  the  plaintiff  intended  to  pay  it  at  the  time  when  he  made 
the  payment  to  the  defendant."  1  But  the  defendant  can  claim 
that  he  actually  received  the  money  as  a  mere  agent,  that  he 
paid  it  over  to  the  person  to  whom  he  was  in  duty  bound  to 
pay  it,  and  that  if  he  is  compelled  to  pay  again  to  the  plaintiff 
the  hardship  will  be  just  as  great  as  in  the  case  of  an  agent  who 
deals  as  such.  Professor  Costigan  suggests  that  the  exception 
rests  upon  an  implied  warranty  by  the  agent  that  he  is  and  will 
remain  a  principal,  and  a  consequent  estoppel  to  set  up  a  pay- 
ment over.2  But  he  concedes  that  the  courts  have  not  ex- 
pressly stated  that  there  is  a  warranty  of  principalship,  and  no 
cases  have  been  found  in  which  an  action  for  the  breach  of 
such  a  warranty 'has  been  maintained.  The  agent,  it  is  true, 
may  be  sued  on  the  contract  which  he  has  made ;  but  that  his 
obligation  is  solely  upon  the  contract  itself  and  as  a  party 
thereto,  and  not  upon  an  implied  warranty  of  principalship, 
is  evidenced  by  the  fact  that  a  judgment  against  the  undis- 
closed principal,  though  unsatisfied,  leaves  no  remedy  against 
the  agent.3 

§  28.  (c)  Payment  over  as  a  defense  to  an  executo  or  admin- 
istrator. —  Payment  over,  before  notice,  is  said  to  be  a  defense 
to  an  executor  or  administrator  as  well  as  to  an  agent.4  But  there 
is  this  significant  difference  —  an  executor  or  administrator  must 
show  not  only  that  he  has  applied  the  money  received  by  him 
to  the  payment  of  creditors,  legatees,  or  distributees,  but  that 
the  condition  of  the  estate  was  such,  when  he  learned  of  the 

1  "  Quasi-Contracts,"  p.  62. 

2 "Change  of  Position  as  a  Defense,"  20  Harv.  Law  Rev.  211. 

1  It  seems  particularly  unreasonable  to  hold  that  there  is  an  implied 
warranty  of  principalship  in  a  case  where,  as  in  Newall  v.  Tomlinson, 
supra,  and  Canal  Bank  v.  Bank  of  Albany,  aupra,  the  agent  is  of  a  class 
the  members  of  which  customarily  deal  as  principals  but  are  known  to 
act,  generally,  on  behalf  of  others. 

4  Beam  v.  Copeland,  1890,  54  Ark.  70 ;  14  S.  W.  1094 ;  Grier  v. 
Huston,  1822,  8  Serg.  &  R.  (Pa.)  402;  11  Am.  Dec.  627.  See  Phette- 
place  v.  Bucklin,  1893,  18  R.  I.  297 ;  27  Atl.  211. 

44 


Chap.  II]      BENEFICIAL   DISPOSITION   NOT   A  DEFENSE  [§  29 

mistake,  that  he  could  not  reimburse  himself.1  And  in  one 
case  it  is  said  that  he  must  show  that  a  reasonable  effort  has 
been  made  to  induce  the  persons  to  whom  he  paid  the  money 
to  return  it.2 

§  29.  (d)  Beneficial  disposition  of  money  or  goods  not  a 
defense.  —  The  consumption,  sale,  or  other  beneficial  dis- 
position by  the  defendant  of  that  which  he  received,  or,  in  the 
case  of  money  received,  its  payment  out  for  the  benefit  of  the 
defendant,  does  not  constitute  such  a  change  of  position  as  justi- 
fies a  refusal  to  make  restitution  in  value.3  The  distinction 
between  payment  over  to  a  principal,  which  is  a  defense,  and 
payment  out  for  the  benefit  of  the  defendant,  which  is  not,  is 
well  stated  in  an  English  case : 

Continental  Caoutchouc  &  Gutta  Percha  Company  v.  Kleinwort, 
Sons  &  Company,  1904,  20  Times  L.  R.  403;  90  L.  T.  R. 
474:  The  defendant  had  advanced  money  to  Kramrisch 
and  Co.,  on  the  security  of  the  shipping  documents  or  bills  of 
lading  of  certain  parcels  of  rubber.  Upon  the  sale  of  the  rubber 
to  the  plaintiffs  the  defendants  had  released  the  bills  of  lading 
under  an  agreement  that  the  price  should  be  paid  by  the  plain- 
tiff to  the  defendants  and  applied  by  the  defendants  on  the 
advances  made  by  them.  Plaintiff  by  mistake  overpaid  the 
defendants,  and  the  defendants  credited  the  amount  received 
to  Kramrisch  and  Co.'s  account,  and  notified  Kramrisch  who 
acknowledged  and  approved  what  they  had  done.  The  court 
held  that  the  plaintiff  was  entitled  to  recover,  COLLINS,  M.R., 
saying  (p.  405) :  "  It  is  clear  law  that  prima  facie  the  person  to 
whom  money  has  been  paid  under  a  mistake  of  fact  is  liable  to 

1  Grier  v.  Huston,  1822,  8  Serg.  &  R.  (Pa.)  402;   11  Am.  Dec.  627. 

2  Phetteplace  v.  Bucklin,  1893,  18  R.  I.  297 ;  27  Atl.  211. 

3  In  Standish  v.  Ross,  1849,  3  Exch.  527,  the  court  said   (p.  534) : 
"It  is  in  respect  of  the  delay  of  the  remedy  only  that  the  defendant 
could  not  be  put  in  statu  quo.     We  think  these  circumstances  form  no 
impediment  to  the  right  to  recover,  if  money  were  paid  over  under  an 
ordinary  mistake  of  fact ;  it  could  not  be  any  bar  to  the  recovery  of  it, 
that  the  defendant  had  applied  the  money  in  the  meantime  to  some 
purchase  which  he  otherwise  would  not  have  made,  arid  so  could  not 
be  placed  in  statu  quo."     As  to  consumption  of  goods  supposed  by  the 
recipient  to  be  a  gift,  see  post,  §  57. 

45 


§  29]  GENERAL  PRINCIPLES  [Part  I 

refund  it,  even  though  he  may  have  paid  it  away  to  third  parties 
in  ignorance  of  the  mistake.  He  has  had  the  benefit  of  the 
windfall  and  must  restore  it  to  the  true  owner.  On  the  other 
hand,  it  is  equally  clear  that  an  intermediary  who  has  received 
money  for  the  purpose  of  handing  it  on  to  a  third  party  and  has 
handed  it  on  is  no  longer  accountable  to  the  sender.  In  such 
a  case  he  is  a  mere  conduit-pipe  and  has  not  had  the  benefit  of 
the  windfall.  .  .  .  Now,  in  this  case  it  is  quite  clear  that,  as 
between  Kleinwort,  Sons,  and  Co.  and  Kramrisch,  the  former 
were  the  persons  primarily  entitled  to  receive  the  purchase- 
money  of  the  goods  in  respect  of  which  they  had  released  the 
bills  of  lading.  Had  the  sum  due  from  the  buyer  been  deposited 
with  a  third  party  and  become  the  subject  of  an  interpleader 
issue  between  Kramrisch  and  the  defendants,  it  must,  I  think, 
have  been  awarded  to  the  defendants.  For  these  reasons  I 
think  that  the  defendants  in  respect  of  the  sum  claimed  are  in 
no  better  position  than  any  other  persons  who  have  received 
for  their  own  benefit  money  paid  to  them  under  a  mistake  of 
fact."  x 

In  this  connection  the  Texas  case  of  Houston  &  Texas  Central 
Railway  Company  v.  Hughes2  is  of  interest.  The  action  was 
brought  to  recover  an  alleged  overpayment  to  a  contractor 
for  the  construction  of  roadbed.  The  defense  was  that  the 
contractor  had  distributed  the  overpayment  to  subcontractors 
on  estimates  of  their  work  made  by  the  plaintiff  and  that  the 
whereabouts  of  such  subcontractors  was  unknown.  The  court 
held  that  even  if  these  facts  were  established  the  plaintiff  was 
entitled  to  recover.  In  support  of  the  decision  it  may  be  ad- 
mitted that  the  contractor  was  not,  like  an  agent,  a  mere 
conduit  through  which  the  money  passed  from  the  railroad  com- 
pany to  the  subcontractors.  And  if  the  overpayment  received 
by  the  contractor  had  been  expended  in  the  payment  of  valid 
claims  against  him,  or  even  if  it  had  been  expended,  under 
a  mistake  of  the  contractor  for  which  the  railroad  company  was 
not  primarily  responsible,  in  the  payment  of  invalid  claims, 
the  decision  would  not  be  open  to  criticism.  But  since  the  de- 

1  See  also  Moors  v.  Bird,  1906,  190  Mass.  400,  410 ;  77  N.  E.  643. 
2 1911,       Tex.  Civ.  App.        ;  133  S.  W.  731. 

46 


Chap.  II]      IS  ACCIDENTAL   LOSS   OR  THEFT   A   DEFENSE  ?      [§  30 

fense  is  that  the  sum  sought  to  be  recovered  was  distributed 
by  the  contractor  by  way  of  an  overpayment  to  subcontractors 
to  whom  he  did  not  owe  it,  and  from  whom  he  received  nothing 
in  return  for  it,  and  since  the  mistake  which  led  to  such  dis- 
tribution was  directly  attributable  to  the  plaintiff's  erroneous 
estimates  of  work  done  by  the  subcontractors,  it  cannot  fairly 
be  said,  either  that  the  contractor  had  the  benefit  of  the 
windfall  resulting  from  the  plaintiff's  mistake,  or  that,  but  for 
his  own  fault,  he  would  have  had  the  benefit  of  it.  The  en- 
forcement of  restitution  under  the  circumstances,  it  is  sub- 
mitted, was  unjust. 

Upon  principle,  there  would  seem  to  be  room  for  the  argu- 
ment that  proof  by  the  defendant  that  money  received  by  him 
from  the  plaintiff  had  been  expended  in  purchases  which  he 
would  not  otherwise  have  made,  or  that  goods  received  from 
the  plaintiff  and  consumed  by  him  were  luxuries  that  he  would 
not  have  purchased,  should  constitute  a  defense.  For  in  such 
a  case  the  defendant's  position  is  so  altered  that  the  enforce- 
ment of  restitution  would  be  a  distinct  hardship.  But,  while 
in  Brisbane  v.  Dacres  l  and  Skyring  v.  Greenwood 2  there  are 
intimations  to  the  effect  that  if,  as  a  result  of  the  receipt  of  the 
money  sought  to  be  recovered,  the  defendant  "  alters  the  habits 
of  his  life,"  restitution  should  not  be  enforced,  the  point  has 
received  very  little  consideration.  It  will  be  more  fully  dis- 
cussed in  a  later  section,  dealing  with  the  obligation  to  pay  for 
goods  supposed  to  be  a  gift  (post,  §  57). 

§  30.  (<'}  Is  accidental  loss  or  theft  of  money  or  goods  a  defense  ? 
-  The  suggestion  has  been  made  that  the  loss  by  accident  or 
theft  of  the  identical  money  or  thing  received  by  the  defendant 
should  be  a  defense.3  The  case  differs  from  that  of  a  voluntary 
change  of  position  in  that  whereas  the  latter  is  the  direct  result 
of  the  plaintiff's  mistake,  the  former  is  so  remotely  connected 
with  the  mistake  that  it  would  hardly  be  called  a  consequence 

1  1813,  5  Taunt.  143. 

2  1825,  4  Barn.  &  Cr.  281. 

3  Professor  Costigan,  ."Change  of  Position  as  a  Defense,'!  20  Harv. 
Law  Rev.  205,  212  n. 

47 


§  31]  GENERAL  PRINCIPLES  [Part  I 

or  result  of  it  at  all.  Upon  the  basis  of  this  difference  it  may 
be  contended  that  a  loss  by  accident  or  theft  is  the  defendant's 
own  calamity ;  that  to  deny  the  plaintiff  relief  is  to  shift  the 
defendant's  misfortune  to  the  plaintiff's  shoulders;  and  that 
such  a  result  is  as  unjust  in  this  case  as  in  that  of  the  accidental 
destruction  of  the  defendant's  building  while  in  process  of  repair 
or  improvement  by  the  plaintiff  (post,  §§  116,  117),  or  that  of 
the  misuse  by  the  defendant's  agent  of  funds  borrowed  without 
authority  and  placed  to  the  defendant's  credit  (post,  §  75). 
The  argument  is  not  without  weight.  It  is  submitted  that 
where  the  mistake  is  one  for  which  neither  party  may  fairly  be 
blamed,  or  one  which  is  due  at  least  as  much  to  the  defendant's 
negligence  as  to  the  plaintiff's,  the  plaintiff  should  be  allowed 
to  recover.  But  where,  on  the  other  hand,  the  plaintiff  is 
solely  or  chiefly  responsible  for  the  mistake,  it  may  be  conceded 
that  the  remoteness  of  his  connection  with  the  defendant's 
loss  is  so  offset  by  his  blamefulness  for  the  mistake  as  to  justify 
a  denial  of  relief. 

§  31.  (/)  Laches  as  a  defense.  —  Laches,  by  which  is  meant 
such  tardiness  in  asserting  a  right  as  makes  its  enforcement 
inequitable,  bars  the  enforcement  of  quasi  contractual  as  well 
as  of  other  obligations  of  an  equitable  nature.1  But  laches 
should  not  be  confused  with  change  of  position.  The  latter, 
it  is  true,  is  an  element  in  the  former,  for  the  defendant  is  not 
prejudiced  unless  some  change  in  his  position  occurs.  But 
while  change  of  position  alone  is  a  defense  only  when  it  appears 
that  the  defendant  was  not  responsible  for  the  mistake  under 
which  the  benefit  was  conferred  upon  him,  or  was  responsible 
in  no  greater  degree  than  the  plaintiff,  laches  is,  or  should  be, 
a  defense  even  when  the  mistake  was  the  result  of  the  defendant's 
negligence  alone. 

1  Skyring  v.  Greenwood,  1825,  4  Barn.  &  Cr.  281 ;  Pooley  v.  Brown, 
1862,  11  C.  B.  N.  S.  566;  United  States  v.  Clinton  Nat.  Bank,  1886, 
28  Fed.  357,  (C.  C.,  la.) ;  Continental  Nat.  Bank  v.  Met.  Nat.  Bank, 
1903,  107  111.  App.  455 ;  Iron  City  Nat.  Bank  v.  Fort  Pitt  Nat.  Bank, 
1893, 159  Pa.  St.  46 ;  28  Atl.  195 ;  23  L.  R.  A.  615.  And  see  London, 
etc.,  Bank  v.  Bank  of  Liverpool,  [1896]  1  Q.  B.  7 ;  Bank  of  St.  Albans  v. 
Farmers',  etc.,  Bank,  1838,  10  Vt.  141. 

48 


Chap.  II]      WHEN   DOES   CAUSE   OF   ACTION   ARISE  ?  [§  32 

§  32.  (VI)  When  does  cause  of  action  arise  ?  Necessity  of 
demand.  —  Inasmuch  as  the  right  of  one  who  confers  a  benefit 
in  misreliance  on  a  right  or  duty  is  equitable  in  character, 
although  enforced  in  an  action  at  law  (ante,  §  6),  it  should  be 
held  to  arise  only  when  the  recipient  of  the  benefit  is  notified 
or  learns  that  a  mistake  has  been  made  in  consequence  of  which 
he  ought  to  make  restitution.  For  to  hold  one  responsible  for 
a  failure  to  restore  a  benefit  received  and  retained  without 
knowledge  of  any  mistake  and  without  notice  of  any  claim  for 
restitution  would  be  manifestly  inequitable. 

It  follows  that  where  the  recipient  of  the  benefit  knows,  at 
the  time  of  its  receipt,  that  it  is  conferred  upon  him  in  mis- 
reliance  upon  a  right  or  duty,  and  that  its  retention  would  be 
unjust,  he  is  under  an  immediate  obligation  to  make  restitu- 
tion and  is  not  entitled  to  notice  or  demand  before  suit.1  Like- 
wise, where  the  recipient,  though  innocent  at  the  time  of  the 
receipt  of  the  benefit,  subsequently  learns  of  the  mistake,  as 
the  result  either  of  his  own  investigations  or  of  information  from 
a  third  person,  demand  is  unnecessary.2  But  where  the  recip- 
ient remains  in  ignorance  of  the  fact  that  a  mistake  has  been 
made  and  that  his  retention  of  the  benefit  is  consequently 
inequitable,  he  should  be  notified  of  the  mistake  and  of  the  claim 
for  restitution  before  an  action  is  instituted  against  him.3 

1  Sharkey  v.  Mansfield,  1882,  90  N.  Y.  227 ;  43  Am.  Rep.  161,  (money 
paid) ;  Martin  v.  Home  Bank,  1899,  160  N.  Y.  190 ;  54  N.  E.  717,  off. 
30  App.  Div.  498;   52  N.  Y.  Supp.  464,  (money  paid). 

2  See  Sheppard  v.  Lang,  1905,  122  Ga.  607 ;   50  S.  E.  371,  (money 
paid) ;   Earle  v.  Bickford,  1863,  6  Allen  (Mass.)  549;  83  Am.  Dec.  65, 
(money  paid) ;  Bishop  v.  Brown,  1879,  51  Vt.  330,  (money  paid). 

»  Freeman  v.  Jeffries,  1869,  L.  R.  4  Exch.  189,  (money  paid) ;  Worley 
v.  Moore,  1881,  77  Ind.  567,  569,  (money  paid ;  cf.  Sehultz  v.  Bd.  of 
Commrs.,  1883,  95  Ind.  323) ;  Sibley  v.  County  of  Pine,  1883,  31  Minn. 
201 ;  17  N.  W.  337 ;  Gillett  v.  Brewster,  1890,  62  Vt.  312 ;  20  Atl.  105, 
(money  paid) ;  Stocks  v.  City  of  Sheboygan,  1877,  42  Wis.  315,  (money 
paid  ;  defendant  ought  to  have  known  facts).  See  Sharkey  v.  Mansfield, 
1882,  90  N.  Y.  227  ;  43  Am.  Rep.  161.  In  Sharkey  v.  Mansfield,  supra, 
FINCH,  J.,  said  (p.  229) :  "Where  the  mistake  is  mutual,  both  parties 
are  innocent,  and  neither  is  in  the  wrong.  The  party  honestly  receiving 
the  money  through  a  common  mistake  owes  no  duty  to  return  it  until 
at  least  informed  of  the  error.  It  is  just  that  he  should  have  an  oppor- 
tunity to  correct  the  mistake,  innocently  committed  on  both  sides,  before 

49 


§  32]  GENERAL  PRINCIPLES  [Part  I 

Unfortunately  there  are  a  number  of  cases  of  money  paid 
under  mistake  which  hold  that  the  cause  of  action  arises  upon 
the  receipt  of  the  money,  and  that  even  against  one  who  re- 
ceives and  retains  it  in  good  faith  a  demand  is  unnecessary.1 
But  in  few  of  them  does  the  question  appear  to  have  been  care- 
fully considered.2  One,  at  least,  is  virtually  overruled  on  this 
point  by  later  decisions  in  the  same  jurisdiction.3  In  the 
most  important  of  them,  Leather  Manufacturers'  Bank  v.  Mer- 

being  subjected  to  the  risks  and  expenses  of  a  litigation.  It  was  said  in 
Abbott  v.  Draper  (4  Denio,  53)  that  'when  a  man  has  paid  money  as  due 
upon  contract  to  another,  and  there  is  no  mistake,  and  no  fraud  or  other 
wrong  on  the  part  of  the  receiver,  there  is  no  principle  upon  which  it 
can  be  recovered  back  until  after  demand  has  been  made.'  While  this 
language  is  not  accurate  as  to  a  mistake  on  the  part  of  the  receiver,  if 
that  was  the  meaning  intended,  the  doctrine  is  clearly  recognized  that 
where  the  receiver  is  guilty  of  fraud  or  other  wrong  in  taking  the  money, 
he  is  not  entitled  to  notice.  The  necessity  of  a  demand  does  not,  there- 
fore, exist  in  a  case  where  the  party  receiving  the  money,  instead  of 
acting  innocently  and  under  an  honest  mistake,  knows  the  whole 
truth  and  consciously  receives  what  does  not  belong  to  him,  taking 
advantage  of  the  mistake  or  oversight  of  the  other  party,  and  claiming 
to  hold  the  money  thus  obtained  as  his  own.  In  such  case  he  cannot 
assume  the  attitude  of  bailee  or  trustee,  for  he  holds  the  money  as  his 
own,  and  his  duty  to  return  it  arises  at  the  instant  of  the  wrongful 
receipt  of  the  overpayment.  He  is  already  in  the  wrong  and  it  needs 
no  request  to  put  him  in  that  position." 

In  Stotsenburg  v.  Fordice,  1895,  142  Ind.  490,  496 ;  41  N.  E.  313, 
810,  it  was  held  that  where  the  defendant  to  an  action  to  recover  on  a 
promissory  note  claimed  to  set  off  interest  paid  by  mistake,  "the  suit 
of  the  appellant  [plaintiff]  excused  the  demand  if  one  was  necessary." 

1  Leather  Manfrs.'  Bank  v.  Merchants'  Bank,  1888,  128  U.  S.  26 ; 
9  S.  Ct.  3 ;  Rutherford  v.  Mclvor,  1852,  21  Ala.  750,  757 ;  Johnson  t>. 
Saum,  1904, 123  la.  145,  148  ;  98  N.  W.  599  (semble)  ;  Sturgis  v.  Preston, 
1883,  134  Mass.  372,  373 ;  Utica  Bank  v.  Van  Gieson,  1821,  18  Johns. 
(N.  Y.)  485,  (but  see  Southwick  ».  First  Nat.  Bank,  1881,  84  N.  Y.  420, 
and  «ases  cited  in  note  1,  p.  49). 

1  Professor  Keener  has  shown  ("Quasi-Con  tracts,"  pp.  144-151)  that 
most  of  the  cases  cited  in  the  opinion  in  Leather  Manfrs.'  Bank  v.  Mer- 
chants' Bank,  1888,  128  U.  S.  26;  9  S.  Ct.  3,  and  Sturgis  v.  Preston, 
1883,  134  Mass.  372,  do  not  fairly  support  the  conclusion  that  against 
an  innocent  defendant  the  cause  of  action  arises  on  the  receipt  of  the 
benefit. 

3  Although  in  Utica  Bank  v.  Van  Gieson,  1821,  18  Johns  (N.  Y.) 
485,  if  was  expressly  declared  that  demand  is  unnecessary,  the  opposite 
view  is  taken  in  Southwick  v.  First  Nat.  Bank,  1881,  84  N.  Y.  420,  and 
Sharkey  v.  Mansfield,  1882,  90  N.  Y.  227;  43  Am.  Rep.  161. 

50 


Chap.  II]       RUNNING   OF   STATUTE   OF   LIMITATIONS  [§  33 

chants'  Bank,1  decided  by  the  United  States  Supreme  Court, 
the  reasoning  of  the  court  fairly  applies  only  to  cases  in  which 
the  defendant,  by  reason  of  express  or  implied  representations, 
innocent  but  false,  is  held  responsible  upon  the  theory  of  a 
breach  of  warranty  and  not  merely  as  the  recipient  of  a  benefit 
conferred  by  mistake.2 

In  Vermont  it  is  held  that  the  necessity  of  a  demand  de- 
pends upon  the  responsibility  for  the  mistake.  If  the  plaintiff 
appears  to  have  been  at  fault,  or  if  neither  party  is  at  fault, 
a  demand  must  be  made;  but  if  the  responsibility  lies  with 
the  defendant,  though  he  is  unaware  that  a  mistake  has  been 
made,  demand  is  unnecessary.3  This  rule,  while  less  objection- 
able than  that  which  excuses  the  plaintiff  from  making  a  demand 
under  any  circumstances,  seems  hardly  fair  to  the  negligent 
but  honest  defendant. 

§  33.  (VII)  Running  of  statute  of  limitations.  —  Ordinarily 
the  statute  of  limitations  runs  from  the  day  when  the  cause  of 
action  arises.  But  in  cases  of  money  paid  or  other  benefit 
conferred  in  misreliance  upon  a  right  or  duty,  it  ought  in 
justice  to  run  from  the  date  of  the  discovery,  by  the  plaintiff, 

1  1888,  128  U.  S.  26 ;  9  S.  Ct.  3. 

2  The  case  was  one  of  the  payment  of  a  cheek  upon  a  forged  indorse- 
ment, both  the  drawee  and  the  holder  believing  the  indorsement  to  be 
genuine.      In  the  course  of  his  opinion,  Mr.  Justice  GRAY  said   (p.  34) : 
"One  who,  by  presenting  forged  paper  to  a  bank,  procures  the  payment 
of  the  amount  thereof  to  him,  even  if  he  makes  no  express  warranty, 
in  law  represents  that  the  paper  is  genuine,  and,  if  the  payment  is  made 
in  ignorance  of  the  forgery,  is  liable  to  an  action  by  the  bank  to  recover 
back  the  money  which,  in  equity  and  good  conscience,  has  never  ceased 
to  be  its  property.  .  .  .     Whenever  money  is  paid  upon  the  represen- 
tation of  the  receiver  that  he  has  either  a  certain  title  in  property  trans- 
ferred in  consideration  of  the  payment,  or  a  certain  authority  to  receive 
the  money  paid,  when  in  fact  he  has  no  such  title  or   authority,  then, 
although  there  be  no  fraud  or  intentional  misrepresentation  on  his  part, 
yet  there  is  no  consideration  for  the  payment,  and  the  money  remains,  in 
equity  and  good  conscience,  the  property  of  the  payer,  and  may  be 
recovered  back  by  him,  without  any  previous  demand,  as  money  had 
and  received  to  his  use.     His  right  of  action  accrues,  and  the  statute  of 
limitations  begins  to  run  immediately  upon  the  payment." 

3  Varnum  v.  Highgate,  1893,  65  Vt.  416 ;    26  Atl.  628,  (defendant 
should  have  known  the  facts) ;  Turner  Falls  Lumber  Co.  v.  Burns,  1899, 
71  Vt.  354;  45  Atl.  896. 

51 


§  34]  GENERAL  PRINCIPLES  [Part  I 

of  his  mistake,  or  the  date  when  by  reasonable  diligence  he 
might  have  discovered  it.1  The  California  statute  so  provides,2 
and  in  Virginia  the  courts,  by  emphasizing  the  analogy  to  cases 
of  fraud  —  in  which  the  statute  is  commonly  held  to  run  from 
the  day  when  the  fraud  was  or  ought  to  have  been  discovered 
—  have  attained  the  same  result.3  But  by  the  weight  of 
authority,  the  statute  runs  from  the  date  of  the  receipt  of  the 
benefit,4  it  being  assumed  in  most  of  the  cases  on  this  point 
that  the  cause  of  action  then  arises.5 

§  34.  (VIII)  Recovery  of  interest.  —  The  primary  obligation 
in  quasi  contract  is  to  make  restitution  in  value  (ante,  §  3) ; 
hence  it  may  be  contended  that  the  purpose  and  effect  of  the 
action  of  assumpsit,  as  a  quasi  contractual  remedy,  is  not  the 
recovery  of  damages  but  the  enforcement  of  specific  perform- 
ance. Even  so,  the  obligor  should  be  compelled  to  answer  for 
damages  resulting  from  his  failure  to  perform  his  obligation 

1  See  Lightwood,  "  Time  Limit  on  Actions,"  p.  239 ;  Story,  "  Equity 
Jurisprudence  "  (13th  ed.)»  §  152 la. 

2  California  Code  of  Civil  Procedure,   §  338 ;    Shain  v.  Sresovich, 
1894,  104  Cal.  402 ;   38  Pac.  51. 

3  Crauford's  Admr.  v.  Smith's  Extr.,  1895,  93  Va.  623 ;  23  S.  E.  235; 
25  S.  E.  657,  (Twenty  years  after  distribution  of  estate  of  supposed 
intestate,  his  will  was  discovered.     Held  :  that  the  statute  did  not  com- 
mence to  run  until  the  discovery  of  the  will.)  ;  Hall  v.  Graham,  1911, 112 
Va.  560 ;  72  S.  E.  105. 

4  Leather  Manfrs.'  Bank  v.  Merchants'  Bank,  1888,  128  U.  S.  26; 
9  S.  Ct.  3 ;    Richardson  v.  Bales,  1899,  66  Ark.  452 ;    51  S.  W.  321 ; 
Schultz  v.  Board  of  Comrs.,  1883,  95  Ind.  323 ;   City  of  Indianapolis  v. 
Patterson,  1887,  112  Ind.  344;  14  N.  E.  551 ;   Jones  v.  School  District, 
1881,  26  Kan.  490;    Sturgis  v.  Preston,  1883,  134  Mass.  372,  (but  see 
Walker  v.  Bradley,   1825,  3  Pick.  (Mass.)  261) ;  Ely  v.  Norton,  1822, 
6  N.  J.  L.  (1  Halst.)  187 ;  Montgomery's  Appeal,  1879,  92  Pa.  St.  202 ; 
37  Am.  Rep.  670,  (overpayment  by  admr.  who  should  have  known  con- 
dition of  estate).     See  Turner  v.  Debell,  1820,  2  A.  K.  Marsh.  (9  Ky.) 
383. 

6  In  Wyckoff  v.  Curtis,  1894,  7  Misc.  R.  444 ;  27  N.  Y.  Supp.  1012, 
however,  the  court  held  that  since  in  New  York  the  cause  of  action  does 
not  arise  until  demand  made,  the  statute  commences  to  run  at  that  time. 
And  inGoodnowu.  Stryker,  1882,  61  la.  261 ;  16  N.  W.486,  which  was  an 
action  to  recover  for  taxes  paid  under  a  mistake  as  to  the  ownership  of 
land,  it  was  held  that  the  cause  of  action  did  not  arise  and  the  statute 
did  not  commence  to  run,  until  the  termination  of  certain  litigation  by 
which  the  title  was  adjudged  to  be  in  the  defendant. 

52 


Chap.    II]  RECOVERY   OF   INTEREST  [§  34 

when  it  ought  to  be  performed.  In  the  case  of  money  paid  in 
misreliance  on  a  right  or  duty,  therefore,  interest  should  be 
recoverable  from  the  day  when  the  cause  of  action  for  restitu- 
tion arises,  as  damages  for  the  defendant's  failure  promptly  to 
perform  his  obligation.  Accordingly,  against  one  who  has  re- 
ceived and  retained  money  in  good  faith,  interest  should  be 
allowed  from  the  date  of  notice  and  demand ;  *  against  one  who 
has  received  or  retained  money  with  knowledge  of  the  payer's 
mistake,  from  the  date  of  his  receipt  of  the  money,  or  of 
his  discovery  of  the  mistake.2  Likewise,  where  the  benefit 
conferred  upon  the  defendant  consists  of  something  other  than 
money  —  as  goods  or  services,  —  interest  should  be  recovered 
on  the  value  of  the  benefit  from  the  inception  of  the  cause  of 
action.  But  there  is  little  authority  on  this  point,  and  the 
whole  subject  of  the  right  to  recover  interest  on  unliquidated 
demands  is  one  upon  which  the  law  is  unsettled.3 

1  Georgia  R.,  etc.,  Co.  v.  Smith,  1889,  83  Ga.  626,  10  S.  E.  235,  237 ; 
Sibley  v.  County  of  Pine,  1883,  31  Minn.  201,  204;    17  N.  W.  337; 
Ashurst  v.  Field's  Admr.,  1877,  28  N.  J.  Eq.  315 ;    Leach  v.  Vining, 
1892,  64  Hun  632 ;  16  N.  Y.  Supp.  822 ;  Grim's  Estate,  1892, 147  Pa.  St. 
190;  23  Atl.  802;   Simon's  Extrs.  v.  Walter's  Extrs.,  1821,  1  McCord 
(S.  C.)  97,  99 ;    Crauford's  Admr.  v.  Smith's  Extr.,  1895,  93  Va.  623 ; 
23  S.  E.  235;    25  S.  E.  657;    Hall  v.  Graham,  1911,  112  Va.  560;  72 
S.  E.  105. 

2  Contra:  Northrop  v.  Graves,  1849,  19  Conn.  548 ;  50  Am.  Dec.  264, 
in  which  interest  was  allowed  only  from  the  date  of  demand.     And 
see  DiU  v.  Wareham,  1844,  7  Met.  (Mass.)  438;   Earle  v.  Bickford, 
1863,  6  Allen  (Mass.)  549 ;    83  Am.  Dec.  65 ;  Talbot  v.  Nat.  Bank  of 
Comm.,  1880,  129  Mass.  67 ;  37  Am.  Rep.  302,  in  which,  although  a 
demand  was  unnecessary  to  raise  an  obligation,  the  plaintiff  was  allowed 
interest  only  from  the  commencement  of  the  action. 

3  Sedgwick,     "Damages,"     §§312-315;     Sutherland,     "Damages," 
§§  347,  348.     In  Day  v.  New  York,  etc.,  R.  Co.,  1880,  22  Hun  (N.  Y. 
Sup.  Ct.)  412,  it  was  held  that  in  an  action  to  recover  the  value  of  land 
and  a  right  of  way  conveyed  to  the  defendant  in  performance  of  an  oral 
contract  within  the  Statute  of  Frauds,  which  contract  the  defendant  re- 
pudiated, the  plaintiff  was  not  entitled  to  interest,  even  from  the  date 
of  the  commencement  of  the  action.     But  in  Tucker  v.  Grover,  1884, 
60  Wis.  240 ;   19  N.  W.  62,  where  the  action  was  for  the  value  of  serv- 
ices rendered  and  for  money  paid  under  a  contract  within  the  Statute 
of  Frauds  interest  was  allowed  from  the  commencement  of  the  action. 


53 


CHAPTER    III 

GENERAL   PRINCIPLES    (continued)  :     MISRELIANCE   RESULTING 
FROM   MISTAKE    OF    LAW 

§  35.  In  general. 

§  36.  (I)  Reasons  for  the  rule  unsound. 

§  37.  (II)  Encroachments  upon  the  rule : 

(1)    In  two  jurisdictions  rejected. 

§  38.         (2)  In  England,  tendency  to  reject  rule  in  equity. 
§  39.         (3)  Statutory  modifications. 
§  40.         (4)  Payments  by  public  officers. 
§  41.         (5)  Payments  to  trustees  or  court  officers. 

§  42.  (Ill)  What  is  the  true  principle  ? 

§  43.  (IV)  Mistake  of  foreign  law. 

§  44.  (V)  Mistake  of  both  law  and  fact. 

§  35.  In  general.  —  In  the  well-known  case  of  Bilbie  v. 
Lumley,1  Lord  ELLENBOROUGH  asked  counsel  for  plaintiff 
"  whether  he  could  state  any  case  where  if  a  party  paid  money 
to  another  voluntarily  with  a  full  knowledge  of  all  the  facts 
in  the  case,  he  could  recover  it  back  again  on  account  of  his 
ignorance  of  the  law  ?  "  As  a  matter  of  fact  there  were  several 
such  cases  in  the  books,2  and  had  they  been  urged  upon  the 
court  it  is  altogether  probable  that  they  would  have  been  fol- 
lowed and  not  improbable  that  the  law  would  have  been  ac- 
cordingly settled  for  all  time.  But  counsel,  though  "  a  most 
experienced  advocate,"  3  is  reported  to  have  made  no  reply, 
and  Lord  ELLENBOROUGH,  declaring  that  "Every  man  must  be 
taken  to  be  cognizant  of  the  law,"  established  the  rule  that 
money  paid  by  mistake  of  law,  even  under  circumstances 

1  1802,  2  East  469,  470,  472. 

2  Hewer  v.  Bartholomew,    1598,  Cro.  Eliz.  614 ;    Bonnel  v.  Foulke, 
1657,  2  Sid.  4 ;  Turner  v.  Turner,  1679,  2  Chan.  Rep.  154 ;    Lansdowne 
v.  Lansdowne,  1730,  2  Jac.  &  Walk.   205;   Bize  v.  Dickason,    1786,  1 
Term  R.  285 ;  and  see  Keener,  "Quasi-Contracts,"  p.  85,  note. 

3  See  Brisbane  v.  Dacres,  1813,  5  Taunt.  163. 

54 


Chap.  Ill]  IN   GENERAL  [§  35 

which  make  it  inequitable  for  the  defendant  to  retain  it,  is  not 
recoverable. 

The  courts  of  law,  while  frequently  evincing  the  most  pro- 
found dissatisfaction  with  the  rule,  have  followed  it  with  un- 
usual consistency.1  And  even  the  courts  of  equity,  though 

1  Brisbane  v.  Dacres,  1813,  5  Taunt.  143,  (share  of  freight  money  paid 
to  admiral  of  fleet  by  captain  of  war  vessel  in  accordance  with  custom 
though  not  required  by  law) ;  Henderson  v.  Folkstone  Waterworks  Co., 
1885,  1  Times  L.  R.  329;  Elliott  v.  Swartwout,  1836,  10  Pet.  (U.  S.) 
137,  153,  (excessive  duties  paid  revenue  officer) ;  Town  Council  of 
Cahaba  v.  Burnett,  1859,  34  Ala.  400,  (liquor  license  money  paid  under 
ordinance  subsequently  held  void) ;  Maryland  Casualty  Co.  v.  Little 
Rock,  etc.,  Co.,  1909,  92  Ark.  306 ;  122  S.  W.  994,  (additional  premium 
paid  on  class  of  employees  not  covered  by  the  terms  of  the  policy) ; 
Brumagim  v.  TiUinghast,  1861,  18  Cal.  265 ;  79  Am.  Dec.  176,  (money 
paid  for  stamps  required  to  be  placed  on  bills  of  lading  by  unconsti- 
tutional state  law);  Wingertes  v.  San  Francisco,  1901,  134  Cal.  547; 
66  Pac.  730 ;  86  Am.  St.  Rep.  294,  (fees  paid  by  executor  to  county 
clerk  under  unconstitutional  statute) ;  Elston  v.  Chicago,  1866,  40  111. 
514 ;  89  Am.  Dec.  361,  (assessments  paid  for  improvements  in  excess  of 
city's  powers) ;  Town  of  Edinburg  v.  Hackney,  1876,  54  Ind.  83,  (liquor 
license) ;  Coburn  v.  Neal,  1901,  94  Me.  541 ;  48  Atl.  178,  (payment  made 
in  ignorance  of  the  negotiable  instruments  law) ;  Alton  v.  First  Nat. 
Bank,  1892,  157  Mass.  341 ;  32  N.  E,  228 ;  18  L.  R.  A.  144 ;  34  Am. 
St.  Rep.  285,  (mistake  as  to  negotiability  of  instrument) ;  Erkens  v. 
Nicolin,  1888,  39  Minn.  461 ;  40  N.  W.  567,  (money  paid  for  a  quit  claim 
deed  to  land  in  ignorance  of  the  rule  that  distances  must  yield  to  natural 
boundaries  called  for  in  the  deed) ;  Campbell  v.  Clark,  1891,  44  Mo. 
App.  249,  (money  paid  on  contract  for  brick  wall) ;  Keazer  v.  Cole- 
brook  Nat.  Bank,  1909,  75  N.  H.  278 ;  73  Atl.  170,  (mistake  as  to  law  of 
negotiable  instruments) ;  Clarke  v.  Dutcher,  1824,  9  Cow.  (N.  Y.)  674, 
(excess  rent  paid  by  a  tenant  "in  ignorance  of  his  own  rights") ;  Flynn 
v.  Kurd,  1889,  118  N.  Y.  19;  22  N.  E.  1109,  (money  paid  by  commis- 
sioner of  highways  in  excess  of  town's  share  in  repair  of  bridge) ;  Bel- 
loff  v.  Dime  Savings  Bank,  1907,  118  App.  Div.  20;  103  N.  Y.  Supp. 
273;  aff.  191  N.  Y.  551 ;  85  N.  E.  1106,  (mistake  as  to  law  of  wills) ; 
Perry  v.  Newcastle,  etc.,  Ins.  Co.,  1852,  8  U.  C.  Q.  B.  (Ont.)  363,  (igno- 
rance as  to  provisions  of  statute  relating  to  insurance  companies) ;  Scott 
v.  Ford,  1904,  45  Or.  531 ;  78  Pac.  742 ;  80  Pac.  899 ;  68  L.  R.  A.  469, 
(ignorance  as  to  law  of  wills) ;  Ege  v .  Koontz,  1846,  3  Pa.  St.  109, 
(money  paid  by  garnishee  to  assignee  in  bankruptcy  of  individual 
creditor) ;  Robinson  v.  Charleston,  1846,  2  Rich.  (S.  C.)  317 ;  45  Am. 
Dec.  739,  (void  license) ;  Hubbard  v.  Martin,  1835,  8  Yerg.  (16  Tenn.) 
498,  (salary  paid  by  disabled  judge  to  defendant  appointed  to  take  his 
place  under  an  unconstitutional  statute) ;  Scott  v.  Slaughter,  1904, 
35  Tex.  Civ.  App.  524 ;  80  S.  W.  643,  (money  paid  for  a  lease) ;  Mayor, 
etc.,  of  Richmond  v.  Judah,  1834, 5  Leigh  (Va.)  305,  (tax  paid  on  mistaken 

55 


§  35]  MISTAKE  OF  LAW  [Part  I 

granting  relief  from  mistakes  of  law  in  other  cases,  have  refused 
to  permit  the  recovery  of  money  paid.1  It  is  the  threefold 
purpose  of  this  chapter:  first,  to  show  that  the  reasons  for 
this  hard  and  fast  rule  of  no  recovery  are  unsound ;  second,  to 
ascertain  what,  if  any,  encroachments  upon  the  rule  have 
been  established;  and  third,  by  means  of  an  examination  of 
the  different  and  unfortunately  conflicting  theories  upon  which 
equity  has  granted  relief  from  mistakes  of  law  in  other  cases, 
to  determine  upon  the  principle  which,  with  proper  regard  for 
justice  and  sound  policy,  ought  to  be  applied.  Mistake  of 
foreign  law,  and  mistake  of  both  fact  and  law,  will  also  be 
briefly  considered. 

construction  of  municipal  ordinance) ;  Gage  v.  Allen,  1894,  89  Wis.  98 ; 
61  N.  W.  361,  (money  paid  by  assignee  of  insolvent  to  a  creditor  not 
entitled  to  receive  it  but  thinking  he  was  obliged  to  do  so  because  of  a 
judgment).  And  see  Heath  &  Milligan  Mfg.  Co.  v.  Nat.  Linseed  Oil 
Co.,  1901,  99  111.  App.  90;  off.  1902,  197  111.  632;  64  N.  E.  732,  (pay- 
ments made  for  oil  at  7.50  Ibs.  per  gal.  when  statutory  gal.  weighed 
7.761) ;  Bond  v.  Coats,  1861, 16  Ind.  202,  (promise  to  pay  an  unenforce- 
able claim,  made  under  mistake  as  to  legal  obligation,  enforced). 
Cf.  Rawson  v.  Bethesda  Baptist  Church,  1905,  123  111.  App.  239; 
off.  1906,  221  111.  216;  77  N.  E.  560;  6  L.  R.  A.  (N.  S.)  448.  Contra: 
Mansfield  v.  Lynch,  1890,  59  Conn.  320 ;  22  Atl.  313 ;  12  L.  R.  A.  285, 
(mistake  as  to  administrative  law) ;  Culbreath  v.  Culbreath,  1849, 
7  Ga.  64 ;  50  Am.  Dec.  375,  (mistake  as  to  law  of  distribution  of  estates) ; 
Scott  v.  Board  of  Trustees,  1909,  132  Ky.  616;  116  S.  W.  788;  21 
L.  R.  A.  (N.  S.)  112,  (liquor  li cense );  Lawrence  v.  Beaubien,  1831, 
2  Bailey  (S.  C.)  623 ;  23  Am.  Dec.  155,  (mistake  as  to  rights  in  land). 
See  also  cases  post,  §  37. 

It  is  a  curious  fact  that  the  rule  appears  to  be  confined  to  cases  of 
money  paid,  although  cases  of  services  rendered  or  goods  delivered  under 
mistake  of  law  are  in  principle  undistinguishable. 

1  Clifton  v.  Cockburn,  1834,  3  Myl.  &  K.  76,  (misconstruction  of  mar- 
riage settlement) ;  Hemphill  v.  Moody,  1879,  64  Ala.  468,  (but  court  here 
allowing  amount  paid  by  mistake  to  be  set  off  against  claims  of  heirs  of 
payee) ;  Tiffany  &  Co.  v.  Johnson  &  Robinson,  1854,  5  Gush.  (27  Miss.) 
227,  232,  (payment  by  sheriff  to  subsequent  execution  creditor) ; 
Knickerbocker  Trust  Co.  v.  Oneonta,  etc.,  R.  Co.,  1910,  138  App.  Div. 
687 ;  123  N.  Y.  Supp.  822,  (money  advanced  on  receiver's  certificates 
issued  under  order  of  court  reversed  on  appeal) ;  Stewart  v.  Ferguson, 
1899,  31  Ont.  112,  115,  (excessive  payments  of  interest  after  maturity  of 
mortgage) ;  Beard  v.  Beard,  1885,  25  W.  Va.  486 ;  52  Am.  Rep.  219, 
(money  voluntarily  paid  after  decree  of  reference  not  settling  liability). 
And  see  Powell  v.  Bunger,  1881,  79  Ind.  468,  471,  (injunction  against 
collection,  by  execution,  of  costs  voluntarily  paid  by  defendant). 

56 


Chap.  Ill]         REASONS   FOR  THE   RULE   UNSOUND  [§  36 

§  36.  (I)  Reasons  for  the  rule  unsound.  —  The  reason  almost 
invariably  assigned  for  the  rule  is  that  given  by  Lord  ELLEN- 
BOROUGH  in  the  leading  case :  "  Every  man  must  be  taken  to 
be  cognizant  of  the  law."  This  appears  to  be  generally  regarded 
(as  it  appears  to  have  been  regarded  by  Lord  ELLENBOROUGH) 
as  nothing  more  than  a  free  translation  of  the  maxim,  Ignorantia 
juris  non  excused.  But  this  maxim  clearly  implies  a  charge  of 
delinquency  —  the  commission  of  a  crime,  the  breach  of  a 
contract,  or  the  commission  of  a  tort,  "  and  therefore  assumes 
the  existence  of  a  defendant  seeking  to  justify  an  act,  in  the 
doing  of  which  it  is  claimed  he  has  violated  some  right " : l 

Lansdown  v.  Lansdown,  1730,  Mosely  364:  KING,  Ld. 
Ch.  (p.  365) :  "  That  maxim  of  law,  Ignorantia  juris  non 
excused,  was  in  regard  to  the  public,  that  ignorance  cannot  be 
pleaded  in  excuse  of  crimes,  but  did  not  hold  in  civil  cases.'* 

queen  v.  Mayor  of  Tewkesbury,  1868,  L.  R.  3  Q.  B.  629: 
BLACKBURN,  J.  (p.  635) :  "  The  rule  is  that  ignorance  of  the  law 
shall  not  excuse  a  man,  or  relieve  him  from  the  consequences 
of  a  crime,  or  from  liability  on  contract." 

Culbreath  v.  Culbreath,  1849,  7  Ga.  64;  50  Am.  Dec.  375: 
NISBET,  J.  (p.  71) :  "The  idea  of  excuse,  implies  delinquency. 
No  man  can  be  excused  upon  a  plea  of  ignorance  of  the  law,  for 
disobeying  its  injunctions,  or  violating  its  provisions,  or  abiding 
his  just  contracts.  He  is  presumed  to  know  the  law,  and  if  he 
does  not  know  it,  he  is  equally  presumed  to  be  delinquent.  I 
remark,  to  avoid'  misconstruction,  that  it  is  of  universal  appli- 
cation in  criminal  cases.  In  civil  matters,  it  ought  not  to  be 
used  to  effectuate  a  wrong." 

The  maxim  has  no  proper  application,  either  in  law  or  in 
policy,  to  the  case  of  one  who  has  done  no  wrong  and  who  seeks 
not  to  inflict  a  loss  upon  another,  but  to  save  himself  from  a  loss. 

Its  identity  with  the  recognized  maxim  Ignorantia  juris  non 
excusat  being  disproved,  the  proposition  that  a  man  is  pre- 
sumed to  know  the  law  is  found  to  be  of  decidedly  question- 
able character.  Said  Lord  MANSFIELD,2  "  as  to  the  certainty  of 

1  Keener,  "  Quasi-Contracts,"  p.  90. 

2  Jones  v.  Randall,  1774,  Cowp.  37,  40. 

57 


§  36]  MISTAKE  OF  LAW  [Part  I 

the  law  ...  it  would  be  very  hard  upon  the  profession,  if 
the  law  was  so  certain,  that  everybody  knew  it."  Said  Chief 
Justice  ABBOTT,1  "  God  forbid  that  it  should  be  imagined  that 
an  attorney,  or  a  counsel,  or  even  a  judge  is  bound  to  know  all 
the  law."  Said  Justice  MAULED  "There  is  no  presumption  in 
this  country  that  every  person  knows  the  law:  it  would  be 
contrary  to  common  sense."  And  there  are  not  a  few  cases 
in  the  books  in  which  ignorance  of  the  law  has  been  permitted 
to  be  proved.3 

It  has  been  contended  also  that  to  permit  a  recovery  would 
lead  to  the  greatest  uncertainty  as  to  one's  rights.  "  There  is 
no  saying  to  what  extent  the  excuse  of  ignorance  might  not  be 
carried."  4  But  the  courts  both  in  England  and  America  have 
long  conceded  that  money  paid  under  mistake  of  fact,  in  cir- 
cumstances which  make  its  retention  inequitable,  may  be 
recovered ;  and  there  appears  to  be  no  reason  to  fear  that  the 
excuse  of  ignorance  of  law  would  prove  a  greater  temptation 
to  the  unscrupulous  or  a  more  effective  weapon  of  injustice. 
Moreover,  in  the  few  jurisdictions  which  have  made  the  experi- 
ment of  permitting  a  recovery  in  case  of  mistake  of  law,  there 

1  Montriou  v.  Jefferys,  1825,  2  Car.  &  P.  113,  116. 

*  Martindale  v.  Falkner,  1846,  2.  C.  B.  706,  719. 

3Lansdown  v.  Lansdown,  1730,  Mosely  364,  (equity  ordered  the 
surrender  of  a  bond  given  by  the  plaintiff  to  secure  defendant's  father  in 
quiet  enjoyment  under  a  mistake  as  to  the  law  of  .inheritance) ;  Rex 
v.  Hall,  1828,  3  Car.  &  P.  409,  (indictment  for  robbery;  defendant 
allowed  to  show  he  thought  property  taken  his  own) ;  Queen  v.  Mayor, 
etc.,  of  Tewkesbury,  1868,  L.  R.  3  Q.  B.  629,  635,  (voters  knew  B., 
one  of  the  candidates  for  town  council,  was  mayor,  but  were  allowed  to 
show  ignorance  that  he  was  thereby  disqualified  as  candidate) ;  Regina 
v.  Twose,  1879,  14  Cox  Cr.  Cas.  327,  (defendant  set  fire  to  furze  on  com- 
mon, thinking  she  did  it  of  right).  And  see  Commonwealth  v.  Stebbins, 
1857,  8  Gray  (Mass.)  492,  (larceny) ;  State  v.  Pullen,  1901,  3  Penne- 
will  (Del.)  184,  50  Atl.  538,  (larceny) ;  Triplett  v.  Commonwealth,  1906, 
122  Ky.  35;  28  Ky.  Law  Rep.  974;  91  S.  W.  281,  (robbery). 

4  Lord  ELLENBOROUGH  in  Bilbie  v.  Lumley,  1802,  2  East  469,  472. 
See  also  opinion  by  MITCHELL,  J.,  in  Erkins  v.  Nicolin,  1888,  39  Minn. 
461 ;  40  N.  W.  567,  and  Pomeroy  on  "Equity  Jurisprudence,"  Vol.  2, 
§842,  where  it  is  said  that  "If  ignorance  of  the  law  were  generally 
allowed  to  be  pleaded,  there  could  be  no  security  in  legal  rights,  no 
certainty  in  judicial  investigations,  no  finality  in  litigations." 

58 


Chap.  Ill]  ENCROACHMENTS   UPON  THE   RULE  [§  37 

appears  to  be  no  abuse  of  the  right  nor  dissatisfaction  with  the 
working  of  the  rule. 

Assuming  then  that  it  is  not  true  that  one  is  presumed  to 
know  the  law,  and  further  assuming  that  the  danger  of  the 
abuse  of  the  right  is  not  a  grave  one,  is  there  any  other  ground, 
any  reason  in  justice  or  public  policy,  which  justifies  the  rule 
of  no  recovery  ?  It  is  believed  that  there  is  not.  On  the  con- 
trary, it  is  believed  that  to  permit  a  recovery,  with  limitations 
the  same  or  similar  to  those  with  which  the  right  to  recover  in 
cases  of  mistake  of  fact  is  hedged  about,  would  sensibly  diminish 
the  area  of  human  rights  at  present  beyond  the  reach  of  the 
law. 

§  37.  (II)  Encroachments  upon  the  rule  :  (1)  In  two  jurisdic- 
tions rejected.  —  In  at  least  two  American  jurisdictions  — 
Connecticut  and  Kentucky  —  the  alleged  distinction  between 
mistake  of  fact  and  mistake  of  law  has  been  consistently  denied. 
In  the  most  frequently  cited  and  quoted  Connecticut  case, 
Northrop's  Executors  v.  Graves,1  Chief  Justice  CHURCH,  in  an 
admirably  clear,  trenchant  opinion,  said :  "  The  mind  no  more 
assents  to  the  payment  made  under  a  mistake  of  the  law, 
than  if  made  under  a  mistake  of  the  facts ;  the  delusion  is  the 
same  in  both  cases ;  in  both  alike,  the  mind  is  influenced  by 
false  motives."  In  Kentucky  the  question  has  been  presented 
in  a  variety  of  cases.  Perhaps  one  of  the  most  interesting  is 
McMurtry  v.  Kentucky  Central  Railroad  Company?  The  rail- 
road company,  having  paid  a  judgment  in  an  action  for  personal 
injuries,  with  interest  from  the  date  of  its  rendition,  brought 
suit  to  recover  the  amount  paid  as  interest  on  the  ground  that 
it  had  been  paid  under  a  mistake,  the  statute  providing  that 
judgments  for  personal  injuries,  inter  alia,  should  not  bear 
interest.  In  giving  judgment  for  the  plaintiff,  the  court  em- 
phasized the  fact  that  there  had  been  no  compromise  or  choice 

1  1849,  19  Conn.  548,  554;    50  Am.  Dec.  234.     Accord:    Kane  v. 
Morehouse,  1878,  46  Conn.  300;   Mansfield  v.  Lynch,  1890,  59  Conn. 
320 ;  22  Atl.  313 ;  12  L.  R.  A.  285 ;  Monroe  Nat.  Bank  v.  Catlin,  1909, 
82  Conn.  227 ;  73  Atl.  3. 

2  1886,  84  Ky.  462,  464 ;   1  S.  W.  815. 

59 


§  38]  MISTAKE  OF  LAW  [Part  I 

of  courses  by  the  company  in  making  the  payment.  "  When 
the  parties,"  said  Justice  HOLT,  "  regard  a  question  of  either 
Jaw  or  fact  as  doubtful,  and  to  avoid  litigation,  and  by  way  of 
compromise,  payment  is  made,  then  no  recovery  can  be  had; 
but  in  the  case  now  before  us  no  question  was  raised  at  the 
time  as  to  the  right  of  the  claimant  to  interest."  In  other 
cases  in  the  same  jurisdiction  recovery  has  been  permitted  of 
meter  rent  paid  by  a  consumer  to  a  gas  company,  which,  under 
a  proper  construction  of  the  contract  between  the  gas  company 
and  the  city,  the  company  had  no  right  to  charge ; 1  of  a  liquor 
license  fee  paid  under  an  invalid  ordinance ; 2  of  premiums 
paid  on  a  void  insurance  policy ; 3  of  money  paid  under  an 
unconstitutional  statute ; 4  of  money  paid  by  a  married  woman 
in  ignorance  of  her  rights  under  a  statute ; 5  of  taxes  illegally 
assessed  under  a  mistake  of  law.6  As  to  taxes,  however,  it 
should  be  noted  that  it  has  been  held  7  that  when  payment 
can  be  coerced  only  by  suit,  then  if  payment  is  made  without 
suit  no  recovery  will  be  allowed.  This  seems  entirely  to  dis- 
regard the  question  of  mistake,  and  erroneously  to  assume 
that  the  only  possible  ground  of  recovery  is  that  of  payment 
under  compulsion. 

§  38.  (2)  In  England,  tendency  to  reject  rule  in  equity.  —  In 
England  there  is  a  tendency,  in  equity  cases,  to  disregard  the 
arbitrary  and  unjust  distinction  between  the  recovery  of 
money  paid  under  mistake  of  law  and  relief  from  such  mis- 

1  Capital  Gas  Co.  v.  Gaines,  1899,  20  Ky.  Law  Rep.  1464 ;  49  S.  W. 
462. 

*Bruner  v.  Stanton,  1897,  102  Ky.  459;  43  S.  W.  411;  Scott  v. 
Board  of  Trustees,  1909,  132  Ky.  616;  116  S.  W.  788;  21  L.  R.  A. 
(N.  S.)  112. 

J  Metropolitan  Life  Ins.  Co.  v.  Bleseh,  1900,  22  Ky.  Law  Rep.  530  : 
58  S.  W.  436. 

*  Board  of  Trustees  v.  Board  of  Education,  1903,  25  Ky.  Law  Rep. 
341;  75  S.  W.  225. 

*  Kentucky,  etc.,  Trust  Co.  v.  Langan,  1911,  144  Ky.  46;  137  S.  W. 
846. 

6  City  of  Louisville  v.  Henning,  1866,  1  Bush  (64  Ky.)  381. 

7  Louisville,  etc.,   R.   Co.  v.  Commonwealth,   1890,  89  Ky.  531 ; 
12  S.  W.  1064.     See  also  Brands  v.  Louisville,  1901,  111  Ky.  56;   63 
S.  W.  2,  (illegal  assessment  for  street  repairs). 

60 


Chap.  Ill]      TENDENCY   TO   REJECT   RULE   IN   EQUITY  [§  38 

takes  in  other  cases.  In  Rogers  v.  Ingham,1  which  has  been 
referred  to  as  "  the  modern  leading  case,"  it  appeared  that  an 
executor,  acting  on  the  advice  of  counsel  in  the  construction 
of  a  will,  proposed  to  divide  a  fund  in  certain  proportions 
between  two  legatees.  One  of  the  legatees,  being  dissatisfied, 
took  the  advice  of  counsel,  which  agreed  with  the  former  opinion. 
The  executor  then  divided  and  paid  over  the  fund,  and  two 
years  later  the  dissatisfied  legatee  filed  this  bill  against  the 
executor  and  the  other  legatee,  alleging  a  mistake  in  construing 
the  will  and  claiming  repayment  from  the  other  legatee.  The 
prayer  of  the  bill  was  denied,  but  the  court  appears  to  have 
based  the  decision,  not  on  the  ground  that  there  could  be  no 
recovery  of  money  paid  under  mistake  of  law,  but  on  the 
ground  that  complainant  having,  after  deliberation  and  advice, 
chosen  one  of  two  courses  open  to  him,  could  not  repudiate  his 
election.  And  Lord  Justice  MELLISH  significantly  said : 

"  I  think  that,  no  doubt,  as  was  said  by  Lord  Justice  Turner, 
'This  Court  has  power  (as  I  feel  no  doubt  that  it  has)  to  relieve 
against  mistakes  in  law  as  well  as  against  mistakes  in  fact';2 
that  is  to  say,  if  there  is  any  equitable  ground  which  makes 
it,  under  the  particular  facts  of  the  case,  inequitable  that  the 
party  who  received  the  money  should  retain  it." 

In  Daniell  v.  Sinclair,3  a  mortgage  account  had  been  settled 
on  the  footing  of  compound  interest,  both  parties  erroneously 
supposing  that  compound  interest  was  legally  collectible,  and 
though  the  court  conceded  that  giving  credit  in  an  account  was 
in  many  respects  equivalent  to  payment,  it  held  that  the 
account  might  be  reopened.  "  In  equity,"  said  the  court, 
"  the  line  between  mistakes  in  law  and  mistakes  in  fact  has 
not  been  so  clearly  and  sharply  drawn."  4 

1  1876,  3  Ch.  Div.  351,  357. 

2  Stone  v.  Godfrey,  1854,  5  De  G.  M.  &  G.  90. 

3  1881,  6  App.  Cas.  181,  190. 

4  See  also  In  re  Hulkes,  1886,  33  Ch.  D.  552 ;    Allcard  v.  Walker, 
[1896]  2  Ch.  369,  381.     In  the  latter  ease,  STIRLING,  J.,  speaking  of  the 
power  of  equity  to  relieve  against  mistakes  of  law,  said:    "No  doubt 
the  jurisdiction  is  one  to  be  carefully  exercised  and  the  facts  in  each  case 

61 


§  39]  MISTAKE   OP   LAW  [Part  I 

§  39.  (3)  Statutory  modifications.  —  In  at  least  six  jurisdic- 
tions —  California,  Montana,  North  Dakota,  South  Dakota, 
Oklahoma,  and  Georgia  —  the  rule  has  been  modified  by  legis- 
lative enactment.  In  the  first  five,  the  statute,  after  providing 
that  apparent  consent  is  not  free  when  obtained  through  mis- 
take and  that  mistake  may  be  either  of  fact  or  of  law,  defines 
the  latter  as  "  (1)  A  misapprehension  of  the  law  by  all  parties, 
all  supposing  that  they  knew  and  understood  it,  and  all  making 
substantially  the  same  mistake  as  to  the  law ;  or  (2)  a  misap- 
prehension of  the  law  by  one  party,  of  which  the  others  are 
aware  at  the  time  of  contracting,  but  \vhich  they  do  not  rectify." l 

The  mistake  defined  in  the  second  clause  contains  an  element 
of  fraud  which  affords  a  separate  and  obvious  ground  for 
relief.  But  the  definition  in  the  first  clause  is  of  a  mistake  in 
the  true  sense,  and  is  remarkable  in  that  by  its  terms  relief  is 
confined  to  cases  in  which  the  mistake  is  common  to  all  parties. 
This  is  a  distinction  which,  as  will  presently  appear,  has  found 
some  favor  elsewhere.  Its  merits  will  be  briefly  discussed  on  a 
later  page  (post,  §  42).  At  this  point  it  is  only  necessary  to 
note  that  while  the  statute  does  not  expressly  extend  to  cases 
of  an  action  at  law  to  recover  money  paid,  or  other  benefits 
conferred,  the  exception  of  such  cases  has  not  been  recognized. 
Thus,  in  Gregory  v.  Clabrough's  Executors,2  it  was  held  that 
the  proceeds  of  the  crop  upon  mortgaged  premises,  paid  by  the 
mortgagor  to  the  mortgagee  on  the  advice  of  an  attorney 
that  the  mortgagee  was  entitled  thereto  because  the  mortgage 
covered  "  rents,  issues,  and  profits,"  might  be  recovered  as 
money  paid  under  mistake  of  law  common  to  all  parties  within 
the  provisions  of  the  code. 

must  be  closely  scrutinized  to  see  which  way  the  equity  lies."  It 
has  been  contended  by  Mr.  Corry  Montague  Stadden  ("Error  of  Law," 
7  Columbia  Law  Rev.  476)  that  at  the  present  day  in  England,  as  well  as 
in  France  and  Germany,  there  is  no  difference  between  mistake  of  law 
and  mistake  of  fact.  But  see  Henderson  v.  Folkstone  Waterworks  Co., 
1885,  1  Times  L.  R.  329. 

1  California  Civil  Code,  §  1578 ;  North  Dakota  Revised  Codes,  1905, 
§  5299 ;  South  Dakota  Civil  Code,  §  1207 ;  Oklahoma  Compiled  Laws, 
1909,  §  1058 ;  Montana  Civil  Code,  §  2123. 

1  1900,  129  Cal.  475 ;  62  Pac.  72. 

62 


Chap.  Ill]  PAYMENTS   BY   PUBLIC   OFFICERS  [§  40 

In  Georgia,  before  the  adoption  of  the  statute,  it  had  been 
held  that  money  paid  under  a  mistake  of  law,  as  distinguished 
from  ignorance  of  the  law,  might  be  recovered,  the  court  in  one 
case  *  defining  the  distinction  as  follows :  "  Ignorance  implies 
passivity;  mistake  imputes  action.  Ignorance  does  not  pre- 
tend to  knowledge,  but  mistake  assumes  to  know.  Ignorance 
may  be  the  result  of  laches,  which  is  criminal ;  mistake  argues 
diligence,  which  is  commendable."  The  statute  appears  to 
recognize  this  distinction,  for  it  provides  that  "  mere  ignorance 
of  the  law  "  will  not  authorize  the  intervention  of  equity.2 
And  in  the  following  section  a  further  limitation  of  the  juris- 
diction appears  to  be  raised  by  the  provision  defining  the  mis- 
takes which  are  relievable  as  mistakes  of  law  "as  to  the  effect 
of  an  instrument  on  the  part  of  both  contracting  parties."  a 
Does  this  mean  that  unless  the  mistake  of  law  be  (1)  as  to  the 
effect  of  an  instrument,  and  (2)  common  to  all  parties,  relief 
will  not  be  granted?  If  so,  the  old  rule  of  no  recovery  is  but 
slightly  relaxed. 

§  40.  (4)  Payments  by  public  officers.  —  It  has  frequently 
been  decided  that  the  rule  of  no  recovery  does  not  extend  to 
the  case  of  the  payment  of  money  by  public  officers  or  public 
agents.4  The  reason  generally  offered  for  this  limitation  is 

1  Culbreath  v.  Culbreath,  1849,  7  Ga.  64,  70 ;    50  Am.  Dec.  375, 
See  also  Lawrence  v.  Beaubien,  1831,  2  Bailey  (S.  C.)  623  ;  23  Am.  Dec. 
155. 

2  Georgia  Code,   §  3978.     See  Arnold  &  DuBose  v.  Georgia,  etc., 
Co.,  1873,  50  Ga.  304. 

3  Georgia  Code,  §  3979. 

4  Wisconsin,  etc.,  R.  Co.  v.  United  States,   1896,   164  U.  S.   190; 
17  S.  Ct.  45  (cf.  Badeau  v.  United   States,    1888,   130  U.  S.   439;    9 
S.  Ct.  579) ;  Barnes  v.  Dist.  of  Col.,  1887,  22  Ct.  Cl.  366;  Ada  County 
v.  Gess,  1895,  4  Idaho  611 ;   43  Pac.  71 ;   Board  of  Com'rs  v.  Heaston, 
1895,  144  Ind.  583  ;  41  N.  E.  457  ;  43  N.  E.  651 ;  55  Am.  St.  Rep.  192  ; 
Heath  v.  Albrook,  1904,  123  la.  559 ;   98  N.  W.  619 ;    State  v.  Young, 
1907,  134  la.  505;   110  N.  W.  292;   Board  of  Com'rs  v.  Patrick,  1874, 
12  Kan.  605  ;  Ellis  v.  Board  of  Auditors,  1895,  107  Mich.  528 ;  65  N.  W. 
577;    Board  of  Supervisors  v.  Ellis,  1875,  59  N.  Y.  620;    Alleghany 
County  v.  Gri'er,  1897,  179  Pa.  St.  639 ;  36  Atl.  353  ;  Commonwealth  v. 
Field,  1887,  84  Va.  26;  3  S.  E.  882;  Douglas  County  v.  Sommer,  1904, 
120  Wis.  424 ;  98  N.  W.  249.     See  also  Kerr  v.  Regester,  1908,  42  Ind. 
App.  375;    85  N.  E.  790,  (action  by  a  taxpayer).     Contra:   Jefferson 

63 


§  41]  MISTAKE    OF   LAW  [Part  I 

the  importance  of  protecting  the  public  funds  and  the  interests 
of  the  community.  But  in  some  of  the  cases,  where  the  defend- 
ant also  is  a  public  officer  or  agent,  stress  is  laid  upon  the  fiduciary 
relation  existing  between  the  parties,  or  between  the  plaintiff's 
principal  and  the  defendant.1  As  it  was  put  in  the  case  of 
Alleghany  County  v.  Grier:2  "Fidelity  to  the  government, 
which  he  represents  and  is  sworn  to  support,  makes  restitution 
a  duty." 

§  41.  (5)  Payments  to  trustees  or  court  officers.  —  Some  of 
the  courts  have  evinced  their  belief  in  the  injustice  and  dis- 
honesty of  the  rule  of  no  recovery  by  refusing  to  extend  it  to 
cases  of  payments  to  trustees  or  other  officers  of  the  court.3 
Said  Lord  Justice  JAMES  in  the  prominent  case  of  Ex  parte 
James:* 

"  I  think  that  the  principle  that  money  paid  under  a  mistake 
of  law  cannot  be  recovered  must  not  be  pressed  too  far,  and  there 
are  several  cases  in  which  the  Court  of  Chancery  has  held  itself 
not  bound  strictly  by  it.  I  am  of  the  opinion  that  a  trustee 
in  bankruptcy  is  an  officer  of  the  Court.  He  has  inquisi- 
torial powers  given  him  by  the  Court,  and  the  Court  regards 
him  as  its  officer,  and  he  is  to  hold  money  in  his  hands  upon 
trust  for  its  equitable  distribution  among  the  creditors.  The 

County  v.  Hawkins,  1887,  23  Fla.  223;  2  So.  362,  365;  People  v. 
Foster,  1890,  133  111.  496 ;  23  N.  E.  615  (cf.  Moffett  v.  People,  1907, 
134  111.  App.  550) ;  Painter  v.  Polk  County,  1890,  81  la.  242 ;  47  N.  W. 
65  ;  25  Am.  St.  Rep.  489 ;  Wayne  County  v.  Randall,  1880,  43  Mich.  137  ; 
5  N.  W.  75 ;  State  v.  Ewing,  1893,  116  Mo.  129 ;  22  S.  W.  476 ;  Territory 
v.  Newhall,  1909,  15  N.  M.  141 ;  103  Pac.  982.  See  also  Morgan 
Park  v.  Knopf,  1902,  199  111.  444 ;  65  N.  E.  322 ;  Board  of  Highway 
Commrs.  v.  City  of  Bloomington,  1912,  253  HI.  164 ;  97  N.  E.  280. 

1  Ellis  v.  Board  of  Auditors,  1895,  107  Mich.  528 ;    65  N.  W.  577 ; 
United   States   v.   Bartlett,  1839,  2   Ware  (Dav.   9)    17;    Fed.   Cas. 
No.  14,532. 

2  1897,  179  Pa.  St.,  639,  642 ;   36  Atl.  353. 

3  Ex  parte  James,  1874,  L.  R.  9  Ch.  609 ;  Ex  parte  Simmonds,  1885, 
16  Q.  B.  D.  308;    Carpenter  v.  Southworth,  1908,  165  Fed.  428;    91 
C.  C.  A.  378 ;  Moulton  v.  Bennett,  1836,  18  Wend.  (N.  Y.)  586 ;  Gillig 
v.  Grant,  1897,  23  App.  Div.  596;    49  N.  Y.  Supp.  78;    Comm.  v. 
Lancaster  County  Ins.  Co.,  1891,  6  Pa.  Dist.  371.     See,  contra,  Wilde 
t>.  Baker,  1867,  14  Allen  (Mass.)  349. 

4  1874,  L.  R.  9  Ch.  609,  614. 

64 


Chap.  Ill]  WHAT   IS   THE   TRUE   PRINCIPLE  ?  [§42 

Court,  then,  finding  that  he  has  in  his  hands  money  which  in 
equity  belongs  to  some  one  else,  ought  to  set  an  example  to 
the  world  by  paying  it  to  the  person  really  entitled  to  it.  In 
my  opinion  the  Court  of  Bankruptcy  ought  to  be  as  honest  as 
other  people." 

This  exception  to  the  rule  has  been  held  in  a  few  cases  to 
extend  to  payments  to  attorneys  at  law,  either  by  their  clients 
or  by  others.  For  example,  in  the  New  York  case  of  Moulton 
v.  Bennett,1  where  it  appeared  that  the  defendant  in  a  litigation 
had  paid  to  the  plaintiff's  attorney  costs  which  were  not  legally 
chargeable,  it  was  held  that  the  money  might  be  recovered. 

§  42.  (Ill)  What  is  the  true  principle  ?  —  As  was  pointed  out 
at  the  beginning  of  this  chapter  (ante,  §  35)  the  courts  of  equity, 
while  generally  refusing  to  enforce  the  repayment  of  money 
paid  under  mistake  of  law,  have  frequently  granted  relief  from 
mistakes  of  law  in  other  cases.  But  they  are  by  no  means 
agreed  as  to  the  jurisdictional  test.  It  is  now  proposed  to 
examine  some  of  the  theories  that  have  been  advanced,  with 
a  view  to  the  selection  of  the  true  test  —  the  test  which  ought 
in  principle  to  be  applied  to  cases  of  actions  to  recover  money 
paid  as  well  as  to  all  other  cases. 

(1)  That  relief  should  be  granted  from  mistake  of  one's  "private 
rights,"  but  not  from  mistake  of  general  law. 

In  the  prominent  case  of  Cooper  v.  Phibbs,2  Lord  WESTBURY, 
"  one  of  the  ablest  judges  that  ever  sat  in  the  English  court 
of  chancery," 3  said : 

"  It  is  said,  '  Ignorantia  juris  haud  excusat ' ;  but  in  that 
maxim  the  word  'jus'  is  used  in  the  sense  of  denoting  general 
law,  the  ordinary  law  of  the  country.  But  when  the  word 
fjus'  is  used  in  the  sense  of  denoting  a  private  right,  that  maxim 
has  no  application.  Private  right  of  ownership  is  a  matter  of 
fact;  it  may  be  the  result  also  of  matter  of  law;  but  if  the 
parties  contract  under  a  mutual  mistake  and  misapprehension 

1  1836,  18  Wend.  (N.  Y.)  586. 

2  1867,  L.  R.  2  H.  L.  149,  170. 

1  Pomeroy,  "Equity  Jurisprudence,"  §  842,  note. 

65 


§  42]  MISTAKE  OF  LAW  [Part  I 

as  to  their  relative  and  respective  rights,  the  result  is,  that  that 
agreement  is  likely  to  be  set  aside  as  having  proceeded  upon  a 
common  mistake." 

There  has  been  a  considerable  inclination  in  courts  of  equity, 
particularly  in  England,  to  follow  this  distinction.  Just  what 
mistakes  Lord  WESTBURY  meant  to  exempt  from  the  operation 
of  the  maxim,  however,  is  not  clear.  The  best  interpretation 
of  his  doctrine,  perhaps,  is  that  offered  by  Mr.  Justice  HOLMES, 
in  Alton  v.  First  National  Bank: 1 

"Lord  Westbury  sometimes  is  supposed  to  have  taken  a 
distinction  as  to  the  effect  of  a  mistake  of  law  according  to 
whether  the  mistaken  principle  is  general  or  special.  But  in 
the  often  quoted  passage  of  his  judgment  he  only  meant  that 
certain  words,  such  as  ownership,  marriage,  settlement,  etc., 
import  both  a  conclusion  of  law  and  facts  justifying  it,  so  that, 
when  asserted  without  explanation  of  what  the  facts  relied  on 
are,  they  assert  the  existence  of  facts  sufficient  to  justify 
the  conclusion,  and  a  mistake  induced  by  such  an  assertion  is 
a  mistake  of  fact.  In  the  case  before  him  the  mistake  was  one 
concerning  the  ownership  of  a  fishery,  and  was  induced  by  a 
general  statement  of  a  certain  person  that  he  owned  it." 

Thus  interpreted,  the  statement  constitutes  a  very  slight 
qualification  of  the  general  rule  of  no  relief  for  mistakes  of  law, 
if  indeed  it  can  be  said  to  qualify  the  rule  at  all. 

(2)  That  relief  should  be  granted  for  mistake  of  law  common  to 
all  parties  —  that  is  to  say,  where  they  all  act  under  the  same  mis- 
apprehension of  law. 

This  modification  of  the  rule  of  no  relief,  as  has  been  seen 
(ante,  §  39),  has  the  sanction  of  legislative  enactment  in  several 
states.  But  it  has  been  justly  condemned.2  As  a  ground  for 
the  reformation  of  a  contract,  the  necessity  that  the  mistake 
shall  be  common  to  both  parties  is  intelligible;  but  in  other 
cases  the  reason  for  such  a  requirement  is  not  apparent. 

1  1892,  157  Mass.  341,  343 ;  32  N.  E.  228;  18  L.  R.  A.  144 ;  34  Am. 
St.  Rep.  285. 

1  Pomeroy,  "Equity  Jurisprudence,"  §  846. 

66 


Chap.  Ill]  WHAT   IS  THE   TRUE   PRINCIPLE  ?  [§  42 

(3)  That  relief  should  be  granted  from  mistakes  of  law  made 
in  reducing  to  writing  a  contract  already  agreed  upon  by  the  parties, 
the  result  being  that  the  language  of  the  writing  has  a  meaning  or 
effect  in  law  different  from  the  intention,  as  distinguished  from  a 
mistake  with  regard  to  the  legal  meaning  or  effect  of  a  written  in- 
strument agreed  upon  as  representing  the  contract  between  the 
parties. 

This  theory  is  a  very  popular  one  with  both  text  writers  and 
judges,1  and  is  invariably  sought  to  be  supported  with  the 
argument  that  in  the  first-mentioned  case  there  is  no  mistake  as 
to  the  legal  import  of  the  contract  actually  made,  but  the  mistake 
of  law  prevents  the  real  contract  from  being  embodied  in  the 
written  instrument.  The  distinction,  however,  has  been 
thought  by  careful  students  to  be  unsound.  The  strongest 
and  clearest  indictment  of  it,  perhaps,  is  that  of  Mr.  Bigelow, 
who  says : 2 

"  The  writing  is  agreed  upon  as  stating  the  contract  in  the  one 
case  as  much  as  in  the  other.  It  matters  not  whether  the  parties 
say  'Here  are  the  facts,  and  here  is  what  on  deliberation  we 
want  to  do/  and  then  accept  from  the  draftsman  the  written 
instrument  and  execute  it  as  embodying  their  intention;  or 
'This  writing  on  consideration  we  accept  as  truly  expressing 
our  intention  and  fix  our  signatures  to  it  accordingly.'  The 
second  act  may  imply  more  deliberation  concerning  the  writing ; 
but  in  neither  case  may  the  deliberation  have  touched  the  legal 
difficulty  which  finally  arises.  .  .  .  The  distinction  is  trifling ; 
it  does  not  go  to  the  root  of  the  matter." 

(4)  That  relief  should  be  granted  from  mistake  as  to  a  clear  and 
established  rule  of  law,  as  distinguished  from  mistake  as  to    a 
doubtful  and  unsettled  rule? 

Thus  stated,  this  modification  certainly  cannot  be  supported. 
In  the  first  place,  it  amounts  to  saying  that  the  better  known 

1  Pomeroy,  "Equity  Jurisprudence,"  §  843,  and  cases  cited.     Story, 
"Equity  Jurisprudence"  (13th  ed.)  §  114,  and  cases  cited. 

2  Note  to  Story,  " Equity  Jurisprudence "  (13th  ed.)  §110;  also  1 
Law  Quart.  Rev.  303. 

.     *  Story,  "Equity  Jurisprudence"  (13th  ed.)  §  121,  and  cases  cited. 

67 


§  42]  MISTAKE  OF  LAW  [Part  I 

is  a  rule  of  law  the  less  responsible  is  one  for  failing  to  know  it. 
And  in  the  second  place,  it  seems  certain  that  it  would  often 
be  difficult  to  decide  whether  a  given  rule  of  law  were  clear  and 
established  or  doubtful  and  unsettled,  and  that  the  varying 
conclusions  of  different  courts  would  lead  to  embarassment  and 
confusion.  An  examination  of  the  earlier  cases  in  which  the 
rule  is  stated,  however,  shows  the  probability  that  the  inten- 
tion was  to  distinguish  unconscious  from  conscious  ignorance  of 
the  law.  Thus,  in.  Naylor  v.  Winch,1  Vice  Chancellor  Sir  JOHN 
LEACH  said : 

"If  a  party  acting  in  ignorance  of  a  plain  and  settled  principle 
of  law,  is  induced  to  give  up  a  portion  of  his  indisputable  property 
to  another  under  the  name  of  compromise,  a  court  of  equity 
will  relieve  him  from  the  effect  of  his  mistake.  But  where  a 
doubtful  question  arises,  such  as  this  question^of  construction 
upon  the  will  of  the  testator,  it  is  extremely  reasonable  that 
parties  should  terminate  their  differences  by  dividing  the  stake 
between  them,  in  the  proportions  which  may  be  agreed  upon." 

In  other  words,  the  distinction  is  between  a  genuine  com- 
promise,  the  parties  knowing  that  they  may  be  surrendering 
legal  rights,  and  a  settlement  made  "  under  the  name  of  a  com- 
promise "  but  really  in  total  and  unconscious  ignorance  that 
any  possible  legal  right  is  yielded.  Stated  in  this  way,  the 
rule,  as  far  as  it  goes,  is  perfectly  sound,  and  is  applicable  alike 
to  mistake  of  law  and  mistake  of  fact.2  Moreover,  it  obvi- 
ously suggests  the  further-reaching  modification  next  to  be 
considered. 

(5)  That  relief  should  be  granted,  unless  at  the  time  of  tJie 
act  there  was  present  to  the  mind  of  the  actor  a  doubt  as  to  the 
law. 

To  put  the  distinction  in  another  way,  if  one  is  conscious  of 
a  doubt  as  to  his  legal  rights  or  duties,  and  with  or  without 

1  1824,  1  Sim.  &  Stu.  555,  564. 

1  Mr.  Pomeroy  escapes  Sir  JOHN  LEACH'S  conclusion  by  insisting  that 
he  referred  to  family  compromises  only  —  such  being  governed  admit- 
tedly by  different  considerations. 

68 


Chap.  Ill]  WHAT   IS   THE   TRUE   PRINCIPLE  ?  [§  42 

deliberation,  with  or  without  advice,  chooses  and  enters  upon 
a  course  of  action,  he  should  not  be  permitted  to  repudiate  his 
choice ;  but  if  one  conceives  and  enters  upon  a  course  of  action 
in  unconscious  ignorance  of  any  question  as  to  his  legal  rights 
or  duties,  relief  should  be  granted. 

This  theory  is  most  ably  supported  by  Mr.  Bigelow,1  who 
contends  that  it  is  the  true  doctrine  of  the  leading  case  of  Hunt 
v.  Rousmanier,2  except  that  there  it  appears  that  in  order  to 
bar  relief  the  choice  must  have  been  deliberately  made.  To 
quote  Mr.  Justice  WASHINGTON  : 3 

"We  mean  to  say,  that  where  the  parties,  upon  deliberation 
and  advice,  reject  one  species  of  security,  and  agree  to  select 
another,  under  a  misapprehension  of  the  law  as  to  the  nature 
of  the  security  so  selected,  a  court  of  equity  will  not,  on  the 
ground  of  such  misapprehension,  and  the  insufficiency  of  such 
security,  .  .  .  direct  a  new  security." 

The  notion  that  deliberation  is  essential  to  the  denial  of  relief 
has  appeared  in  other  cases.  For  example,  in  Rogers  v.  Ingham* 
Lord  Justice  JAMES  said : 

"Where  people  have  a  knowledge  of  all  the  facts,  and  take 
advice,  and  whether  they  get  proper  advice  or  not,  the  money 
is  divided  and  the  business  is  settled,  it  is  not  for  the  good  of 
mankind  that  it  should  be  reopened." 

But  the  test  of  choice  —  with  or  without  deliberation  — 
seems  to  be  the  more  scientific  one,  and  while,  as  has  sufficiently 
appeared,  the  authorities  on  the  subject  are  in  the  utmost 
confusion,  there  is  no  doubt  that  a  large  number  of  cases  may 
be  brought  into  line  with  it.5  Moreover,  it  is  a  test  which  is 
supported  by  the  cases  of  money  paid  under  mistake  of  fact. 
For  while  it  is  there  generally  held  that  negligence  in  not  know- 

1  Story,  "Equity  Jurisprudence"  (13th  ed.)   §110,  note  on  mistake 
of  law  ;  also  1  Law  Quart.  Rev.  303. 

2  1823,  8  Wheat.  (U.  S.)  174;  1828,  1  Pet.  (U.  S.)  1. 

3  1  Pet.  (U.  S.)  17. 

. 4  1876,  3  Ch.  D.  351,  357. 
6  See Bigelow's note  to-Story,  "Equity  Jurisprudence"  (13th ed.)  §  110. 

69 


§  43]  MISTAKE  OF  LAW  [Part  I 

ing  the  fact  is  not  a  bar  to  recovery  (ante,  §  15),  an  examination 
of  the  cases  will  show  that  in  most  if  not  all  of  them  the  negli- 
gence referred  to  is  an  unconscious  negligence  —  that  is  to  say, 
the  plaintiff,  at  the  time  of  payment,  entertained  no  doubt  as 
to  the  facts.  And,  conversely,  it  is  held  that  when  the  fact 
is  disputed  or  acknowledged  to  be  in  doubt,  a  payment  once 
made  cannot  be  recovered  (ante,  §  17). 

It  is  submitted,  then,  that  this  test  of  the  jurisdiction  to 
relieve  from  mistake  is  the  true  one,  and  that  it  would  prove  as 
satisfactory  in  cases  of  mistake  of  law  as  it  has  already  proved 
in  cases  of  mistake  of  fact.  And  it  is  respectfully  urged  upon 
our  courts  and  legislatures  that  without  abrogating  the  present 
rule  denying  recovery  of  money  paid  under  mistake  of  law,  but 
by  confining  its  application  to  cases  in  which  the  money  appears 
to  have  been  paid  with  the  consciousness  of  a  doubt  as  to  the 
law,  the  hardship  of  the  rule  will  be  minimized  if  not  entirely 
eliminated,  and  the  whole  law  of  relief  from  mistake  placed 
upon  a  basis  of  sound  and  consistent  policy. 

§  43.    (IV)  Mistake  of  foreign  law.  —  As  a  result  of  the  rule 

I,  that  even  the  courts  of  one  State  are  not  presumed  to  know  the 
laws  of  other  States  and  cannot  take  cognizance  of  them  until 

_      legally  proved,  money  paid  by  a  citizen  of  one  State  under  a  mis- 
-  take  as  to  the  law  of  a  foreign  State  or  of  another  of  the  United 
States  is  regarded  as  paid  under  a  mistake  of  fact  and  therefore 
may  be  recovered : 

Haven  v.  Foster,  1829,  9  Pick.  (Mass.)  112 ;  19  Am.  Dec.  353  : 
Mistake  by  residents  of  Massachusetts  as  to  New  York  law 
of  descent.  MORTON,  J.  (p.  130) :  "The  parties  knew,  in  fact, 
that  the  intestate  died  seised  of  estate  situated  in  the  State  of 
New  York.  They  must  be  presumed  to  know  that  the  distri- 
bution of  that  estate  must  be  governed  by  the  laws  of  New 
York.  But  are  they  bound,  on  their  peril,  to  know  what  the 
provisions  of  these  laws  are  ?  If  the  judicial  tribunals  are  not 
presumed  to  know,  why  should  private  citizens  be?  If  they 
are  to  be  made  known  to  the  court  by  proof,  like  other  facts, 
why  should  not  ignorance  of  them  by  private  individuals  have 
the  same  effect  upon  their  acts  as  ignorance  of  other  facts  ? 

70 


Chap.  Ill]         MISTAKE   OF   BOTH   FACT   AND   LAW  [§  44 

Juris  ignorantia  est,  cum  jus  nostram  ignoramus,  and  does  not 
extend  to  foreign  laws  or  the  statutes  of  other  states." 

Vinalv.  Continental  Const.,  etc.,  Co.,  1889,  53  Hun  (N.  Y.  Sup. 
Ct.)  247;  6  N.  Y.  Supp.  595:  Mistake  by  nonresident  as 
to  validity  of  proceedings  consolidating  New  York  corporations. 
LEARNED,  P.  J.  (p.  252) :  "  Foreign  laws  (including  laws  of 
other  states)  are  facts.  The  presumption  that  every  one 
knows  the  laws  of  his  own  state  is  hard  enough.  He  never  is 
presumed  to  know  the  laws  of  all  the  other  states  in  this  country, 
and  the  laws  of  all  the  nations  of  the  world."  x 

Presumably,  however,  relief  would  not  be  granted  in  case 
the  law  of  the  foreign  State  were  the  same  as  that  of  the 
plaintiff's  domicile. 

§  44.  (V)  Mistake  of  both  fact  and  law.  —  Where  one's 
misreliance  upon  a  supposed  duty  is  the  result  of  two  mistakes, 
one  of  fact  and  one  of  law,  he  is  not  entitled  to  relief  in  juris- 
dictions where  mone>  paid  under  mistake  of  law  cannot  be 
recovered : 

Needles  v.  Burk,  1884,  81  Mo.  569 ;  51  Am.  Rep.  251 : 
Action  to  recover  the  value  of  certain  property  delivered  to  the 
defendant  in  satisfaction  of  a  supposed  liability  for  the  alleged 
act  of  the  plaintiff's  infant  son  in  negligently  setting  fire  to  the 

1  Bank  of  Chillicothe  v.  Dodge,  1850,  8  Barb.  (N.  Y.  Sup.  Ct.)  233, 
(mistake  by  Ohio  bank  as  to  the  New  York  statute  governing  issue  of 
commercial  paper).  See  Norton  v.  Harden,  1838,  15  Me.  45 ;  32  Am. 
Dec.  132 ;  yEtna  Ins.  Co.  v.  Mayor,  1896,  7  App.  Div.  145 ;  40  N.  Y. 
Supp.  120, 124,  (mistake  by  non-resident  as  to  legality  of  New  York  tax 
assessment). 

Professor  Keener  suggests  that  a  plaintiff  who  seeks  to  recover 
money  paid  under  a  mistake  as  to  the  law  of  the  jurisdiction  where  the 
action  is  brought  would  not  be  allowed  to  recover  if,  though  a  resident 
of  another  jurisdiction,  he  paid  the  money  in  the  jurisdiction  as  to  the 
law  of  which  he  was  mistaken.  "Surely,"  he  says  ("Quasi-Contracts," 
p  94),  "a  court  would  not  be  justified  in  saying  that  a  non-resident  is 
entitled  to  relief,  though  making  a  mistake  as  to  the  law  of  the  juris- 
diction where  the  money  was  paid,  while  in  that  jurisdiction,  when  a 
resident  making  a  similar  mistake  would  have  no  right  to  recover." 
But  on  the  other  hand,  would  a  court  be  justified  in  saying  that  since 
the  residents  of  a  particular  state  are  presumed  to  know  the  law  of  that 
state  a  foreigner  who  happens  to  be  in  the  state  temporarily  must  also 
be  presumed  to  know  its  law  ? 

71 


§  44]  MISTAKE   OF   LAW  [Part  I 

defendant's  barn.  HOUGH,  C.  J.  (p.  572):  "It  is  settled  in 
this  state  that  a  father  is  not  responsible  for  injuries  inflicted 
through  the  negligence  or  willful  wrong  of  his  minor  child. 
The  plaintiff,  therefore,  was  not  liable  to  the  defendant,  Burk, 
for  the  value  of  his  barn,  even  though  it  had  been  set  on  fire  by 
the  plaintiff's  son.  If  the  plaintiff's  son  had  fired  the  barn, 
and  in  consequence  thereof,  but  in  ignorance  of  the  fact  that 
he  was  not  legally  liable  therefor,  the  plaintiff  had  paid  the 
defendant  the  amount  of  his  loss,  it  would  not  be  pretended  that 
he  could  recover  it  back." 

If,  however,  the  misreliance  upon  a  supposed  duty  is  the 
result  of  a  mistake  of  fact  alone,  the  circumstance  that  the 
plaintiff  also  labored  under  a  mistake  of  law  which  affected 
the  policy  of  performing  the  supposed  duty  should  not  prevent 
a  recovery  (see  ante,  §  18).  For  example,  if  by  the  law  of 
Missouri,  a  father  were  responsible  in  damages  for  the  torts 
of  his  minor  child,  and  the  plaintiff  in  the  foregoing  case  had 
paid  under  a  mistake  as  to  the  fact  of  the  commission  of  the 
tort  and  also  under  a  mistaken  belief  that  he  was  criminally 
responsible  for  his  son's  act,  he  would  have  been  entitled  to 
a  recovery.  For  the  only  mistake  as  to  his  legal  duty  to  pay 
would  have  been  a  mistake  of  fact;  the  mistake  of  law  would 
have  affected  merely  the  policy  of  making  the  payment. 


72 


a 


CHAPTER  IV 

MISRELIANCE   ON   NON-EXISTENT   OR   INVALID   CONTRACT 

§  45.     In  general. 

§  46.     (I)  Misreliance   on   contract :    Gifts  and    gratuitous  services 

distinguished. 

§  47.         Same :  Peculiar  doctrine  of  a  few  cases. 
§  48.         Same  :   Disappointed  expectations. 
§  49.         Same  :   Incidental  benefits. 
§  50.         Same  :  Burden  of  proof. 

§  51.         Same  :  Effect  of  family  relationship  upon  burden  of  proof. 
§  52.     (II)  Sundry  instances  of  the  obligation,  classified  according  to  na- 
ture of  defect  in  contract : 
(A)  Acceptance  of  offer  wanting : 

(1)  Because  of  ambiguity. 

§  53.  (2)  Because  of  offeree's  ignorance  of  offer. 

§  54.  (3)  Because  of  mistake  as  to  identity  of  offerer. 

§  55.  (4)  Circumstances  justifying  retention  of  benefit. 

§  56.  (a)  When  defendant  knows  that  compensation  is  expected 

—  Boston  Ice  Co.  v.  Potter. 

§  57.  (6)  When  defendant  believes  that  compensation  is  not  ex- 

pected. 

§  58.  (c)  Concord  Coal  Co.  v.  Ferrin,  and  Boulton  v.  Jones. 

§  59.         (B)  Assumed  fact  non-existent. 
§  60.  (1)  Sale  or  lease  of  non-existent  property. 

§  61.  (2)  Insurance  of  non-existent  risk. 

§  62.  (3)  Assignment  of  void  patent. 

§  63.  (4)  Sale  of  non-existent  or  defective  title. 

§  64.         (C)  Promise  indefinite. 

§  65.  Same  :   Engagements  of  honor  distinguished. 

§  66.         (D)  Required  form  wanting. 
§  67.         (E)  Contractual  capacity  wanting. 
§  68.  (1)  Married  women. 

§  69.  (2)  Infants. 

§  70.  (3)  Lunatics,  drunkards,  and  spendthrifts. 

§  71.  (4)  Corporations. 

§  72.         (F)  Authority  of  agent  wanting. 
§  73.  Same  :   Instrument  under  seal. 

§  74.  Same :  Agent's  abortive  execution  of  instrument  under  seal. 

§  75.  Same  :   Receipt  of  benefit  by  principal. 

§  76.  Same :  Misuse  of  money  by  agent. 

§  77.  Same :  Receipt  of  benefit  by  agent. 

§  78.  Same :    Enforcement  of  restitution  against  public  policy  — • 

Benefit  conferred  upon  municipal  corporations. 
§  79.  Same  :  Form  of  action  against  principal. 

73 


§  45]  MISRELIANCE  ON  NON-EXISTENT   CONTRACT        [Part  I 

§  45.  In  general.  —  One  may  honestly  believe  that  a  certain 
transaction  amounts  to  a  contract,  when  as  a  matter  of  fact 
some  essential  element  of  contract  is  wanting.  A  benefit  con- 
ferred in  misreliance  upon  such  a  supposed  contract,  under 
circumstances  which  make  its  retention  unjust  and  its  restitu- 
tion not  against  policy,  should  be  restored. 

In  the  treatment  of  this  subject,  it  will  be  expedient  in  the 
first  place  to  distinguish  the  cases  of  gifts  and  gratuitous  serv- 
ices from  those  of  benefits  conferred  in  reliance  upon  a  sup- 
posed contract,  and  then  to  consider  a  variety  of  cases  of  the 
latter  sort,  which  for  purposes  of  convenience  may  be  classified, 
according  to  the  nature  of  the  defect  in  the  contract,  as  follows : 

A.  Acceptance  of  offer  wanting. 

B.  Assumed  fact  non-existent. 

C.  Promise  indefinite. 

D.  Required  form  wanting. 

E.  Contractual  capacity  wanting. 

F.  Authority  of  agent  wanting. 

§  46.  (I)  Misreliance  on  contract :  Gifts  and  gratuitous  ser- 
vices distinguished.  —  If  one,  at  the  time  of  conferring  a  benefit 
upon  another,  confers  it  as  a  gift,  that  is,  without  intending 
thereby  to  establish  contractual  relations,  it  cannot  afterward 
be  claimed  that  the  benefit  was  conferred  in  misreliance  upon 
a  supposed  contract.  Consequently,  though  the  donor's 
intention  may  subsequently  be  altered,  no  quasi  contractual 
obligation  to  make  restitution  will  arise : 

Cicotte  v.  Church  of  St.  Anne,  1886,  60  Mich.  552 ;  27  N.  W. 
682 :  Action  to  recover  the  value  of  legal  services  rendered  by 
the  plaintiff,  an  attorney  at  law,  for  the  benefit  of  the  defendant 
church  corporation  of  which  he  was  a  trustee.  SHERWOOD 
J.  (p.  558) :  "The  simple  fact  that  services  are  rendered  does 
not  raise  a  liability  on  the  part  of  the  person  for  whom  they  are 
rendered,  even  though  done  at  his  request,  if  the  circumstances 
are  such  as  to  rebut  the  inference  that  compensation  is  to  be 
made.  When  services  are  performed  from  kindly  motives, 
^ ~"~ 


Chap.  IV]  GIFTS   DISTINGUISHED  [§  46 

ancL&ith  charitableintentions.  the  law  will  not  imply  a  promise 


to 


This  rule  is  interestingly  exemplified  in  the  two  cases  of 
St.  Joseph's  Orphan  Society  v.  Walpert  2  and  Shepherd  v.  Young, 
Admr?  In  the  former  the  plaintiff  had  supported  and  edu- 
cated four  children  who  were  supposed,  when  received,  to  be 
penniless,  but  were  afterwards  discovered  to  have  money; 
in  the  latter  the  plaintiff  had  supported  a  destitute  grandchild, 
who  was  killed  in  a  railway  accident  and  whose  administrator 
subsequently  recovered  damages  from  the  company.  In  both 
cases  relief  was  denied  upon  the  ground  that  the  support  had 
been  furnished  without  intention  to  charge  therefor. 

In  an  English  case,4  where  the  guardians  of  the  poor  had 
supplied  necessaries  to  an  infant  who  afterward  became 
entitled  to  a  legacy,  the  court  allowed  a  recovery,  saying,  "  I 
cannot  agree  that  a  pauper  who  takes  relief  in  the  shape  of 
necessaries  which  keep  him  alive,  takes  that  relief  so  entirely 
of  right,  that  he  is  not  under  a  legal  liability  to  pay  if  he  after- 
wards comes  into  money."  Unless  this  decision  rests  solely 

1  Also  :    Hughes  ».  Dundee  Mortgage,  etc.,  Co.,  1884,  21  Fed.  169, 
(legal  services)  ;    Osier  v.  Hobbs,  1878,  33  Ark.  215,  (care  of  child)  ; 
Levy  v.  Gillis,  1897,  1  Pennewill  (Del.)  119;  39  Atl.  785,  (work  in  po- 
litical campaign)  ;   Dunlap  v.  Allen,  1878,  90  111.  108,  (services  in  family 
with  which  plaintiff  was  staying)  ;   Evans  v.  Henry,  1896,  66  111.  App. 
144,  (services  as  foreman)  ;  Simon  v.  Tipton,  1899,  50  S.  W.  1106  (Ky.), 
(services  in  obtaining  mail  contract)  ;  Ayland  v.  Rice,  1871,23  La.  Ann. 
75,  (friendly  services  as  painter)  ;    Brown  v.  Tuttle^lSasrsT)  My.  -±0!2  , 
13  Atl.  583,  (services  of  common  law  wu*e)-T^Kerr  yTCusenbary,  1895, 
60  Mo.  App.  558,  (procuring  a  lease)  ;   but  see  Hay  v.  Walker,  1877, 
65  Mo.  17,  (clerk  and  bookkeeper)  ;  Potter  j>.  i^arp^^  1R7Q,  7ft  XT  v 
157,   (use  of  barn  and  teaming)4-^Van  Buren  v.  Reformed  Church, 
1872,  62  Barb.  (N.  Y.  Sup.  Ct.)  495,  (church  music)  ;  Pickslay  v.  Starr, 
1894,  76  Hun  10  ;  27  N.  Y.  Supp.  616,  (gift  of  check)  ;  Swires  v.  Parsons, 
1843,  5  Watts  &  Serg.  (Pa.)  357,  (services  of  reputed  wife)  ;    Gross  v. 
Caldwell,  1892,  4  Wash,  670  ;  30  Pac.  1052,  (mutual  favors  between  ' 
brokers).     See  Kaufman  Advertising  Agency  v.  Snellenburgh,   1904, 
43  Misc.  Rep.  317  ;  88  N.  Y.  Supp.  199,  ("write  ups"  to  secure  patron- 
age). 

2  1882,  80  Ky.  86. 

3  1857,  8  Gray  (Mass.)  152  ;   69  Am.  Dec.  242. 

4  In  re  Clabbon,  [1904]  2  Ch.  465,  467.     See  also  Birkenhead  Union 
v.  Brookes,  1906,  70  J.  P.  406. 

75 


§  46]  MISRELIANCE  ON  NON-EXISTENT  CONTRACT        [Part  I 

upon  considerations  of  public  policy,  it  may  be  upheld  only 
upon  the  theory  that  guardians  of  the  poor  furnish  support 
to  paupers,  not  as  a  gift,  but  with  the  intention  of  charging 
therefor  and  collecting  if  they  can.  If  this  be  true,  although 
the  attitude  of  the  pauper  may  prevent  the  formation  of  a  con- 
tract, the  case  is  at  least  one  of  dutiful  intervention  in  the 
pauper's  affairs  under  circumstances  which  raise  an  obligation 
to  make  restitution  (post,  §§  202,  204).  It  has  frequently 
been  held  in  America,  however,  that  in  the  absence  of  express 
contract  a  pauper  incurs  no  liability  for  relief  afforded  him,1 
and  this  appears  to  be  the  law  even  where  the  pauper  had 
property  when  the  relief  was  furnished.2 

Another  illustration  of  the  rule  is  furnished  by  the  cases 
holding  that  one  who  performs  the  conditions  contained  in  an 
offer  of  a  reward  in  ignorance  that  a  reward  has  been  offered,3 
or^  with  knowledge  of  the  offer  but  without  intention  to  claim 
the  reward74^HnnoT"recover!  These  cases,  it  is  true,  are  de- 
ciSeoTupon  the  theory  that  there  is  no  contract,  but  it  seems 
equally  clear  that  no  quasi  contractual  obligation  to  pay  the 
value  of  the  service  arises.  Even  where  the  service  is  rendered 

1  Jones  County  v.  Norton,  1894,  91  la.  680 ;   60  N.  W.  200,  (insane 
pauper) ;    Inhabitants  of  Deer-Isle   v.   Eaton,    1815,   12  Mass.   328 ; 
Chariton  County  v.  Hartman,  1905, 190  Mo.  71 ;  88  S.  W.  617  ;  Charles- 
town  v.  Hubbard,  1838,  9  N.  H.  195.     But  an  obligation  may  be  im- 
posed upon  the  pauper  by  statute.     See  Kennebunkport  v.  Smith,  1843, 
22  Me.  445. 

2  Inhabitants  of  Stow  v.  Sawyer,  1862,  3  Allen  (Mass.)  515 ;   City 
of  Albany  v.  McNamara,  1889,  117  N.  Y.  168 ;  22  N.  E.  931 ;  6  L.  R.  A. 
212.     But  see  Chester  ».  Underbill,  1844,  16  N.  H.  64,  66. 

3  Williams  v.  West  Chicago,  etc.,  R.  Co.,  1901,  191  111.  610 ;  61  N.  E. 
456 ;  85  Am.  St.  Rep.  278 ;  Lee  v.  Flemingsburg,  1838,  7  Dana  (37  Ky.) 
28,  (but  see  Auditor  v.  Ballard,  1873,  9  Bush  (72  Ky.)  572 ;  15  Am.  Rep. 
728) ;    Smith  v.  Vernon  County,  1905,  188  Mo.  501 ;  87  S.  W.  949 ; 
70  L.  R.  A.  59 ;    107  Am.  St.  Rep.  324 ;  Fitch  v.  Snedaker,  1868,  38 
N.  Y.  248 ;  97  Am.  Dec.  791 ;  Rowland  v.  Lounds,  1873,  51  N.  Y.  604 ; 
10  Am.  Rep.  654;  Stamper  v.  Temple,  1845,  6  Humph.  (25  Tenn.)  113; 
44  Am.  Dec.  296 ;  Broadnax  v.  Ledbetter,  1907,  100  Tex.  375 ;  99  S.  W. 
1111 ;  9  L.  R.  A.  (N.  S.)  1057.     Contra:  Eagle  v.  Smith,  1871,  4  Houst. 
(Del.)  293;    Dawkins  v.  Sappington,  1866,  26  Ind.  199;    Auditor  v. 
Ballard,  1873,  9  Bush  (72  Ky.)  572;    15  Am.  Rep.  728;    Russel  v. 
Stewart,  1872,  44  Vt.  170. 

4  Hewitt  ».  Anderson,  1880,  56  Cal.  476 ;  38  Am.  Rep.  65. 


Chap.  IV]  ("GIFTS  DISTINGUISHED  [§  47 

with  the  intent  to  claim  any  reward  that  may  be  offered,  but 
without  knowledge  that  a  reward  has  been  offered,  it  can 
scarcely  be  said  that  there  is  misreliance  upon  a  supposed 
contract. 

§  47.  Same :  Peculiar  doctrine  of  a  few  cases.  —  In  a  few 
cases  it  has  been  held,  apparently,  that  even  though  the  plaintiff 
intends  not  to  charge  for  his  services,  he  may  recover  if  the 
defendant  is  unaware  of  such  intention  : 

Thomas  v.  Thomasville  Shooting  Club,  1897,  121  N.  C.  238 ; 
28  S.  E.  293 :  Action  for  services  rendered  in  securing  hunting 
ground  leases.  FAIRCLOTH,  CJ.  (p.  240):  "In  apt  time, 
the  defendant  asked  the  court  to  instruct  the  jury  that  if  the 
plaintiff,  when  he  got  the  leases,  expected  to  make  no  charge, 
but  expected  remuneration  afterwards  by  employment  from 
the  defendant,  he  could  not  recover  for  getting  up  the  leases. 
This  prayer  was  refused,  but  in  lieu  thereof  his  Honor  charged 
that:  'If  Thomas  did  not  intend  at  the  time  to  charge  for 
getting  up  the  leases,  and  this  was  known  to  the  defendant, 
then  he  could  not  charge  and  recover  for  the  same ;  but,  if  it 
was  not  known  to  the  defendant  that  Thomas  did  not  intend 
to  charge,  then  Thomas  could  afterwards  sue  for  and  recover 
for  his  services  in  getting  up  the  leases.'  We  see  nothing  prej- 
udicial to  the  defendant  in  the  charge  as  given,  which  included, 
in  substance,  the  defendant's  prayer,  or  so  much  thereof  as  he 
was  entitled  to.  When  the  law  implies  a  promise  to  pay  for 
work  done  and  accepted,  and  there  is  no  agreed  price,  the 
laborer  may  recover  the  reasonable  value  of  his  services,  unless 
there  be  some  agreement  or  understanding  that  nothing  is  to  be 
paid."  1 

In  other  words,  the  presumption  of  a  contract,  arising  from 
the  acceptance  of  services  rendered,  can  be  rebutted,  not  by 
evidence  that  the  plaintiff  did  not  intend  to  contract,  but  only 
by  the  establishment  of  an  "  agreement  or  understanding  " 
that  no  contractual  obligation  was  to  result.  This  seems  to 
go  too  far.  Indeed,  it  is  difficult  upon  any  ground  to  support 

1  Also :  Hay  v.  Walker,  1877,  65  Mo.  17,  (clerk  and  bookkeeper). 
And  see  Prince  v.  McRae,  1881,  84  N.  C.  674,  (physician). 

77 


§  48]  MISRELIANCE   ON   NON-EXISTENT  CONTRACT        [Part  I 

the  decision.  The  plaintiff's  lack  of  intent  to  contract  is  fatal 
to  the  theory  of  a  genuine  implied  contract.  Nor  do  the  ele- 
ments of  quasi  contractual  obligation  appear  to  be  present, 
for  one  who  renders  services  without  the  intention  to  charge 
therefor  can  hardly  be  said  to  rely  upon  a  supposed  right  to 
compensation.  If  the  decision  is  to  be  upheld,  it  must  be  upon 
the  theory  that  the  plaintiff  rendered  the  services  with  the 
intention  of  acquiring  a  contract  right  to  compensation,  but 
with  the  further  intention  not  to  enforce  that  right  in  case 
his  expectation  of  subsequent  employment  should  be  realized. 
Cases  of  this  sort  will  be  considered  in  the  following  section. 

§  48.  Same  :  Disappointed  expectations.  —  It  is  immaterial 
that  a  donor's  hope  or  expectation  that  his  donee  will  recip- 
rocate his  generosity  or  indirectly  reward  him  is  disappointed. 
Misreliance  upon  a  supposed  legal  right,  not  upon  a  mere 
hope  of  reward,  is  the  foundation  of  liability  —  a  distinction 
which  the  courts  not  infrequently  have  been  compelled  to 
point  out : 

Osborn  v.  Governors  of  Guy's  Hospital,  1727,  2  Str.  728: 
"The  plaintiff  brought  a  quantum  meruit  pro  opere  et  labore 
in  transacting  Mr.  Guy's  stock  affairs  in  the  year  1720.  It 
appeared  he  was  no  broker,  but  a  friend ;  and  it  looked  strongly 
as  if  he  did  not  expect  to  be  paid,  but  to  be  considered  for  it 
in  his  will.  And  the  Chief  Justice  [RAYMOND]  directed  the 
jury,  that  if  that  was  the  case,  they  could  not  find  for  the 
plaintiff,  though  nothing  was  given  him  by  the  will;  for 
they  should  consider  how  it  was  understood  by  the  parties 
at  the  time  of  doing  the  business,  and  a  man  who  expects  to 
be  made  amends  by  a  legacy  cannot  afterwards  resort  to  his 
action." 

Collyer  v.  Collyer,  1889,  113  N.  Y.  442;  21  N.  E.  114: 
Action  for  board  and  lodging  furnished  to  defendant's  intestate, 
who  was  a  sister  of  the  plaintiff.  EARL,  J.  (p.  449) :  "  It  is 
undoubtedly  true  that  the  plaintiff  showed  great  kindness  and 
liberality  to  his  sister.  But  no  one  can  read  this  evidence  and 
draw  therefrom  any  inference  that  he  expected  any  reward 
from  his  sister  during  her  lifetime.  He  knew  she  was  to  the 
utmost  degree  penurious  and  miserly,  and  that  she  would  hoard 

78 


Chap.  IV]  DISAPPOINTED   EXPECTATIONS  [§  48 

her  pelf  and  cling  to  her  property  so  long  as  she  lived.  He 
doubtless  expected  that  by  his  kindness  to  her  she  would  be 
induced  to  make  a  favorable  disposition  of  her  property  in  his 
favor  at  her  death.  The  fact  that  his  expectation  has  been 
disappointed  furnishes  no  ground  for  now  stamping  what  at 
the  time  were  acts  of  kindness  and  generosity  with  the  mer- 
cenary features  of  a  contract  and  compensation."  l 

La  F&ntain  v.  Hayhurst,  1896,  89  Me.  388 ;  36  Atl.  623 : 
Action  for  board  furnished  defendant  and  his  four  children, 
and  for  services  rendered.  The  plaintiff  testified  that  she  did 
not,  at  the  time,  expect  any  compensation  ;  that  she  was  engaged 
to  be  married  to  the  defendant  and  rendered  the  services  in 
expectation  of  marriage.  The  defendant  subsequently  married 
another  woman.  EMERY,  J.  (p.  392) :  "The  services  sued  for  here 
were  no  part  of  that  contract  [to  marry],  but  merely  incidents 
or  consequences  of  it.  The  plaintiff  expected  no  pay  for  them. 
Her  expectation  was  confined  to  the  promised  marriage.  With 
that  she  would  have  been  satisfied.  -  With  damages  for  its  loss 
she  must  be  satisfied."  2 

1  Additional  cases  of  disappointed  expectation  of  legacy :    Le  Sage 
v.  Coussmaker,  1794,  1  Esp.  187 ;  McClure  v.  Lenz,  1907,  40  Ind.  App. 
56 ;  80  N.  E.  988 ;   Lee  ».  Lee,  1834,  6  Gill  &  J.  (Md.)  316 ;  Mundorff  ». 
Kilbourn,  1853,  4  Md.  459 ;    Davison  v.  Davison,  1861,  13  N.  J.  Eq. 
(2  Beas.)  246 ;  Martin  v.  Wright's  Admrs.,  1835,  13  Wend.  (N.  Y.)  460 ; 
28  Am.  Dec.  468;    Little  v.  Dawson,  1791,  4  Dull.  (Pa.)    Ill;  In  re 
Walker's  Est.,  1832,  3  Rawle  (Pa.)  243;  Messier  v.  Messier,  1912,  R.  I. 

;  82  Atl.  996.     But  see  Robeson  v.  Niles,  1889,  7  Mackey  (18  D.  C.) 
182 ;  Roberts  ».  Swift,  1793,  1  Yeats  (Pa.)  209 ;  1  Am.  Dec.  295. 

Analogous  to  these  cases  is  that  of  the  architect  who  prepares  and 
submits  preliminary  sketches  in  the  hope  of  future  employment.  See 
Scott  v.  Maier,  1885,  56  Mich.  554 ;  23  N.  W.  218  ;  56  Am.  Rep.  402. 

2  Accord:  Clary  v.  Clary,  1899,  93  Me.  220;   44  Atl.  921.     But  see 
Robinson  v.  Gumming,  1742,  2  Atkyns  409,  in  which  Lord  HARDWICKE 
says  (p  409) :    "If  a  person  has  made  his  addresses  to  a  lady  for  some 
time,  upon  a  view  of  marriage,  and,  upon  a  reasonable  expectation  of 
success,  makes  presents  to  a  considerable  value,  and  she  thinks  proper 
to  deceive  him  afterwards,  it  is  very  right  that  the  presents  themselves 
should  be  returned,  or  the  value  of  them  allowed  to  him ;   but,  where 
presents  are  made  only  to  introduce  a  person  to  a  woman's  acquaint- 
ance, and  by  means    thereof  to  gain  her  favor,  I  look  upon  such  a 
person  only  in  the  light  of  an  adventurer,  especially  where  there  is  a 
disproportion  between  the  lady's  fortune  and  his,  and  therefore,  like 
all  other  adventurers,  if  he  will  run  risques,  and  loses  by  the  attempt, 
he  must  take  it  for  his  pains." 

79 


§  48]  MISRELIANCE  ON  NON-EXISTENT  CONTRACT        [Part  I 

Similarly,  if  a  benefit  is  conferred  without  the  intention  of 
charging  the  recipient,  but  in  the  expectation  of  payment  from 
a  third  party,  the  recipient  is  not  liable : 

Coleman  v.  United  States,  1894,  152  U.  S.  96 :  14  S.  Ct.  473 : 
Action  to  recover  fees  for  legal  services  beneficial  to  the  de- 
fendant. It  was  conceded  that  complainants  did  not  expect 
the  defendant  would  compensate  them  but  looked  for  recom- 
pense to  the  clients  who  retained  them.  Mr.  Justice  SHIRAS, 
(p.  99) :  "  We  think  that  a  promise  to  pay  for  services  can  only 
be  implied  when  the  court  can  see  that  they  were  rendered  in 
such  circumstances  as  authorized  the  party  performing  to 
entertain  a  reasonable  expectation  of  their  payment  by  the 
party  benefited."  l 

The  case  of  a  benefit  conferred  as  a  gratuity  though  with 
the  hope  or  expectation  of  voluntary  reward  should  be  dis- 
tinguished from  that  of  a  benefit  conferred  in  reliance  upon 
a  contract  right  to  compensation  but  with  the  intention  not 
to  enforce  such  right  in  the  event  of  an  expected  reciprocation 
or  reward : 

Baxter  v.  Gray,  1842,  4  Scott  N.  R.  374:  ERSKINE,  J. 
(p.  376) :  "It  appears  from  the  evidence  that  the  plaintiff 
forbore  to  assert  his  claim  in  the  lifetime  of  the  testatrix,  in 
the  expectation  that  he  would  be  better  paid  in  the  shape  of  a 
legacy.  But,  unless  it  is  shown  that  the  plaintiff's  services 
were  rendered  upon  a  distinct  understanding  that  he  was  to 
receive  no  remuneration  except  what  the  testatrix  might  think 
fit  to  leave  him  by  her  will,  there  is  no  answer  to  the  action."2 

Grandin  v.  Admr.  of  Reading,  1855,  10  N.  J.  Eq.  (2  Stock.) 
370:  The  Chancellor  (p.  371):  "This  old  lady  was  main- 
tained by  him  for  eight  years.  The  law  implies  a  contract  on 

1  Accord:  Morrison  t>.  Jones,  1880,  6  111.  App.  89,  (legal  services); 
Dodge  v.  Lansing,  etc.,  Traction  Co.,  1908,  152  Mich.  100;  115  N.  W. 
1004,  (services  of  secretary  of  corporation). 

1  See  also  Robeson  v.  Niles,  1889,  7  Mackey  (18  D.  C.)  182,  (expec- 
tation of  legacy) ;  Cook  v.  Bates,  1896,  88  Me.  455 ;  34  Atl.  266,  (mu- 
tual services) ;  Roberts  v.  Swift,  1793,  1  Yeats  (Pa.)  209 ;  1  Am.  Dec. 
295,  (expectation  of  legacy) ;  Von  Carlowitz  v.  Bernstein,  1902,  28  Tex. 
Civ.  App.  8 ;  66  S.  W.  464,  (expectation  of  legacy). 

80 


Chap.  IV]  INCIDENTAL   BENEFITS  [§  49 

her  part  to  remunerate  him.  To  deprive  him  of  the  benefit 
of  this  implication,  the  court  should  be  satisfied  that  he  looked 
alone  to  Mrs.  McCullough's  will  for  remuneration,  and  intended 
to  rely  upon  her  generosity  solely.  I  am  not  satisfied  from  the 
evidence  that  such  was  Joseph  Reading's  intention." 1 

§  49.  Same  :  Incidental  benefits.  —  Where  one,  in  the  pres- 
ervation of  his  own  property  or  the  promotion  of  his  own  in- 
terests, does  something  which  is  of  incidental  advantage  to 
another,  there  is  no  obligation  to  pay  the  value  of  such  ad- 
vantage. Even  if  the  person  conferring  the  benefit  supposes 
that  he  will  be  entitled  to  compensation,  he  can  hardly  be  said 
to  confer  it  in  reliance  upon  such  supposed  right.  It  has  ac- 
cordingly been  held  that  the  United  States  could  not  recover 
from  a  railroad  company  the  value  of  its  services  in  rebuilding 
the  railroad  company's  bridges,  the  work  having  been  done 
as  a  military  necessity ; 2  that  the  owner  of  the  lower  part  of 
a  house  was  not  liable  for  the  advantage  resulting  to  him  from 
the  repair  of  the  roof  by  the  owner  of  the  upper  part  and  roof ; 3 
that  one  who  thickened  and  strengthened  that  part  of  an  ancient 
party  wall  which  was  on  his  own  land,  in  order  to  sustain  a 
building  he  was  erecting,  was  not  entitled  to  recover  from  the 
owner  of  the  adjoining  property  who  subsequently  used  such 
strengthened  wall ; 4  that  nothing  could  be  recovered  from  the 
owner  of  a  vessel  by  the  underwriters  who  had  her  docked  for  th 
purpose  of  making  necessary  average  repairs,  although  the 
ing  of  the  vessel  enabled  the  owner  to  make  a  survey  required 
for  the  retention  of  her  classification ; 5  that  one  who  in  pumping 
out  his  own  quarry  incidentally  freed  another's  quarry  from 

1  See  Hudson  v.  Hudson,  1891,  87  Ga.  678 ;   13  S.  E.  583 ;  27  Am. 
St.  Rep.  270,  which,  however,  was  a  case  of  impossibility  of  performance 
by  the  defendant,  a  topic  to  be  treated  later.     See  post,  §  127. 

2  United  States  v.  Pacific  R.  Co.,  1887,  120  U.  S.  227 ;  7  S.  Ct.  490. 

3  Loring  v.  Bacon,  1808,  4  Mass.  575. 

4  Walker  v.  Stetson,  1894,  162  Mass.  86 ;   38  N.  E.  18 ;   44  Am.  St. 
Rep.  350.     For  an  interesting  note  on  this  case,  see  8  Harv.  Law  Rev. 
171. 

5  Ruabon  Steamship  Co.  v.  London  Assurance,  [1900] 
Marine  Ins.  Co.  v.  China,  etc.,  Co.,  1886,  11  A.  C.  573. 

81 


§  50]  MISRELIANCE  ON  NON-EXISTENT  CONTRACT        [Part  I 

an  accumulation  of  water  could  not  recover  for  such  service;1 
that  one  who  was  benefited  by  experiments  made  by  another  to 
test  the  value  of  certain  patented  inventions  in  which  both  are 
interested  was  under  no  obligation  to  pay  for  such  benefit.2 

§  50.  Same :  Burden  of  proof.  —  Although  the  burden  of 
proving  reliance  upon  a  supposed  contract  rests  on  the  plaintiff, 
evidence  that  a  substantial  benefit  has,  with  the  defendant's 
acquiescence,  been  conferred  upon  him,  will  in  most  cases 
fairly  lead  to  the  inference  that  the  plaintiff  expected  pay- 
ment, and  believed  that  the  defendant  was  aware  of  such 
expectation,  and  will  therefore  establish  a  prima  facie  case  of 
reliance.3  This  prima  facie  case  will  not  be  overcome  by  evi- 
dence that  the  plaintiff  was  aware  of  the  defendant's  poverty.4 
It  may  be  overcome,  however,  by  evidence  that  the  benefit  was 
conferred  in  an  emergency  —  as  in  the  saving  of  the  defendant's 
property  from  fire  or  flood ; 5  that  similar  benefits  had  previously 

1  Ulmer  v.  Farnsworth,  1888,  80  Me.  500 ;   15  Atl.  65. 

2  Davidson  v.  Westehester  Gas  Light  Co.,  1885,  99  N.  Y.  558; 
2  N.    E.    892.     See    also   Peters   v.    Gallagher,  1877,  37   Mich.  407, 
(floating  another's  logs  in  order  to  free  his  own). 

In  Griffin  v.  Sansom,  1903,  31  Tex.  Civ.  App.  560 ;  72  S.  W.  864,  the 
plaintiff  was  not  allowed  to  recover  one  half  of  the  cost  of  a  party  wall 
erected  in  the  belief  that  defendant  would  be  liable,  and  actually  used 
by  the  defendant,  but  under  circumstances  not  resulting  in  a  contract- 
ual obligation.  See  also  Sherred  v.  Cisco,  1851,  4  Sandf.  (N.  Y. 
Superior  Ct.)  480;  List  v.  Hornbrook,  1867,  2  W.  Va.  340.  On  the 
obligation  to  contribute  to  cost  of  party  walls  generally,  see  note  in 
66  L.  R.  A.  673. 

3  See  Hughes  v.  Dundee  Mortgage,  etc.,  Co.,  1884,  21  Fed.  169  ; 
Hood  v.  League,  1894,  102  Ala.  228;    14' So.  572,  (housekeeping  for  a 
paralytic);    Hunt  v.  Osborn,  1907,  40  Ind.  App.  646;   82  N.  E.  933; 
Weston  v.  Davis,  1844,  24  Me.  (11  Shep.)  374 ;  Kiser  v.  Holladay,  1896, 
29  Or.  338 ;  45  Pac.  759,  (services  of  aged  man  on  farm) ;    Moyer's 
Appeal,  1886,   112  Pa.  St.  290;   3  Atl.  811,   (services  of  grandson); 
Wojahn  v.  Nat.  Union  Bank,  1911,  144  Wis.  646 ;  129  N.  W.  1068. 

*  Worthington  v.  Plymouth,  etc.,  R.  Co.,  1897,  168  Mass.  474 ; 
47  N.  E.  403,  (corporation  without  funds). 

s  See  Bartholomew  v.  Jackson,  1822,  20  Johns.  (N.  Y.)  28;  11  Am. 
Dec.  237:  "If  a  man  humanely  bestows  his  labor,  and  even  risks  his 
life,  in  voluntarily  aiding  to  preserve  his  neighbor's  house  from  destruc- 
tion by  fire,  the  law  considers  the  service  rendered  as  gratuitous,  and  it, 
therefore,  forms  no  ground  of  action.'!  See  also  Hertzog  v.  Hertzog, 
1857,  29  Pa.  St.  465,  468. 

82 


Chap.  IV]  EFFECT    OF   FAMILY   RELATIONSHIP  [§  51 

been  conferred  by  the  plaintiff  upon  the  defendant  without 
request  for  payment ; 1  or  that  the  benefit  was  of  a  kind  usually 
conferred  without  the  expectation  of  pecuniary  reward.2 

§  51.  Same  :  Effect  of  family  relationship  upon  burden  of 
proof.  —  The  presumption  of  an  expectation  of  payment  does 
not  arise  when  services  are  rendered  by  one  member  of  a  family 
to  another  member,  and  in  such  a  case  it  is  necessary  for  the 
plaintiff  to  prove  affirmatively  that  the  services  were  rendered 
not  as  a  gratuity  but  in  reliance  upon  a  supposed  contract 
right  to  compensation : 

Disbrow  v.  Durand,  1892,  54  N.  J.  L.  343 ;  2*  Atl.  545  : 
McGiLL,  Ch.  (p.  345) :  "  Ordinarily,  where  services  are  rendered 
and  voluntarily  accepted,  the  law  will  imply  a  promise  on  the 
part  of  the  recipient  to  pay  for  them;  but  where  the  services 
are  rendered  by  members  of  a  family,  living  as  one  household, 
to  each  other,  there  will  be  no  such  implication,  from  the  mere 
rendition  and  acceptance  of  the  services.  In  order  to  recover 
for  the  services,  the  plaintiff  must  affirmatively  show  either 
that  an  express  contract  for  the  remuneration  existed,  or  that 
the  circumstances  under  which  the  services  were  rendered  were 
such  as  exhibit  a  reasonable  and  proper  expectation  that  there 
would  be  compensation.  The  reason  of  this  exception  to  the 
ordinary  rule  is  that  the  household  family  relationship  is  pre- 
sumed to  abound  in  reciprocal  acts  of  kindness  and  good  will, 
which  tend  to  the  mutual  comfort  and  convenience  of  the 
members  of  the  family,  and  are  gratuitously  performed ;  and, 
where  that  relationship  appears,  the  ordinary  implication  of  a 
promise  to  pay  for  services  does  not  arise,  because  the  presump- 
tion which  supports  such  implication  is  nullified  by  the  pre- 
sumption that  between  members  of  a  household  services  are 
gratuitously  rendered.  The  proof  of  the  services,  and,  as  well, 
of  the  family  relation,  leaves  the  case  in  equipoise,  from  which 
the  plaintiff  must  remove  it  or  fail.  The  great  majority  of 
cases  in  which  this  exception  to  the  ordinary  rule  has  been 

1  See  De  Cesare  v.  Flauraud,  1902,  69  App.  Div.  299 ;    74  N.  Y. 
Supp.  593,  (services  as  barber). 

2  Van  Buren  v.  Reformed  Church,  1872,  62  Barb.  (N.  Y.)  495,  (serv- 
ices as  organist  in  village  church). 

83 


§  51]  MISRELIANCE  ON  NON-EXISTENT  CONTRACT        [Part  I 

given  effect  have  been  between  children  and  their  parents,  or 
the  representatives  of  the  parents'  estate ;  and  that  fact  appears 
to  have  led  the  courts  of  some  of  our  sister  states  to  speak  of  it 
as  restricted  to  cases  where  such  a  relationship  in  blood  existed  ; 
but  it  is  not  perceived  how,  within  the  reason  for  the  exception, 
it  is  to  be  limited  to  mere  propinquity  of  kindred.  It  rests 
upon  the  idea  of  the  mutual  dependence  of  those  who  are  mem- 
bers of  one  immediate  family,  and  such  a  family  may  exist, 
though  composed  of  remote  relations,  and  even  of  persons  be- 
tween whom  there  is  no  tie  of  blood."  l 

This  exception  to  the  general  rule,  as  explained  in  the  opinion 
just  quoted,  rests  upon  the  family  relationship,  rather  than 
that  of  consanguinity  or  affinity,  and  includes  the  cases  of  serv- 

1  Accord:  Hogg  v.  Laster,  1892,  56  Ark.  382;  19  S.  W.  975,  (foster 
child) ;  Friermuth  v.  Friermuth,  1873,  46  Cal.  42,  (son) ;  Walker  v. 
Taylor,  1901,  28  Colo.  233 ;  64  Pac.  192,  (foster  child) ;  Hudson  v. 
Hudson,  1892,  90  Ga.  581 ;  16  S.  E.  349,  (son) ;  Freeman  v.  Freeman, 
1872,  65  111.  106,  (son) ;  Collar  v.  Patterson,  1891,  137  111.  403  ;  27  N.  E. 
604,  (niece  by  marriage) ;  Niesh  v.  Gannon,  1902,  198  111.  219 ;  64  N.  E. 
1000,  (niece) ;  Hill  v.  Hill,  1889,  121  Ind.  255 ;  23  N.  E.  87,  (brother-in- 
law)  ;  McGarvey  v.  Roods,  1887,  73  la.  363 ;  35  N.  W.  488,  (daughter) ; 
Wyley  v.  Bull,  1889,  41  Kan.  206 ;  20  Pac.  855,  (foster  child) ;  Marple 
v.  Morse,  1902,  180  Mass.  508 ;  62  N.  E.  966,  (mother) ;  Harris  v.  Smith, 
1889,  79  Mich.  54 ;  44  N.  W.  169 ;  6  L.  R.  A.  702,  (stepdaughter) ; 
Guenther  v.  Birkicht's  Admr.,  1856,  22  Mo.  439,  (stepson) ;  Lillard  v. 
Wilson,  1903,  178  Mo.  145 ;  77  S.  W.  74,  (parents) ;  Bell  v.  Rice,  1897, 
50  Neb.  547 ;  70  N.  W.  25,  (stepfather) ;  Disbrow  v.  Durand,  1892, 
54  N.  J.  L.  343 ;  24  Atl.  545,  (sister) ;  Carpenter  v.  WeUer,  1878,  15 
Hun  (N.  Y.  Sup.  Ct.)  134,  (sister) ;  Stallings  v.  Ellis,  1904,  136  N.  C. 
69 ;  48  S.  E.  548,  (father) ;  Mosteller's  Appeal,  1858,  30  Pa.  St.  473, 
(son) ;  Houck's  Executors  v.  Houck,  1882,  99  Pa.  St.  552,  (daughter) ; 
Dash  v.  Inabinet,  1898,  53  S.  C.  382;  31  S.  E.  297,  (daughter) ;  Gorrell 
v.  Taylor,  1901,  107  Tenn.  568^  64  S.  W.  888,  (son-in-law) ;  Andrus  v. 
Foster,  1845,  17  Vt.  556,  (foster  child) ;  Jackson's  Admr.  v.  Jackson, 
1898,  96  Va.  165 ;  31  S.  E.  78,  (grandson) ;  Cann  v.  Cann,  1894,  40 
W.  Va.  138 ;  20  S.  E.  910,  (son) ;  Bostwick  v.  Bostwick,  1888,  71  Wis. 
273;  37  N.  W.  405,  (parents).  But  see  In  re  Bishop's  Estate,  1906, 
130  la.  250 ;  106  N.  W.  637,  (father  resided  with  widowed  daughter ; 
no  presumption  here  of  gratutity  from  family  relation) ;  Dance's 
Admr.  v.  Magruder,  1904,  26  Ky.  L.  Rep.  220;  80  S.  W.  1120,  (brother 
and  sister :  burden  of  proof  on  defendant  to  show  that  services 
consisting  of  nursing  and  washing  clothes  rendered  gratuitously) ; 
Houser  v.  Sain,  1876,  74  N.  C.  552,  (grandfather  and  granddaughter). 

84 


Chap.  IV]         SUNDRY   INSTANCES   OF   OBLIGATION  [§  52 

ices  rendered  by  an  adopted  member  of  a  household,1  by  a- 
visitor,2  or  by  a  concubine.3  Apparently  it  does  not  cover  the 
case  of  services  rendered  by  one  who,  though  a  near  blood 
relative,  is  not  living  under  the  defendant's  roof.4  / 

§  52.  (II)  Sundry  instances  of  obligation  classified  according 
to  nature  of  defect  in  contract:  (A)  Acceptance  of  offer  wanting : 
(1)  Because  of  ambiguity.  —  It  is  essential  to  the  formation  of 
a  contract  that  the  acceptance  conform  to  the  requirements  of 
the  offer.  But  if  there  is  an  ambiguity  in  the  terms  of  the 
offer,  an  acceptance  which  appears  to  coincide  with  the  offer 
may  in  reality  vary  from  it.5  Of  such  cases  Turner  v.  Webster  6 
is  an  excellent  example.  The  plaintiff  offered  to  watch  over 
certain  property  for  the  defendant  for  "  $1.50  per  day,  and 
nights  the  same,"  meaning  thereby  $1.50  for  a  day  of  twelve 
hours,  or  $3.00  for  a  day  of  twenty-four  hours.  The  defendant's 
agent  understood 'the  offer  to  mean  $1.50  per  day  of  twenty- 
four  hours,  and  under  that  misunderstanding  the  plaintiff  was 
employed.  The  promise  of  the  plaintiff  being  to  do  certain 
work  in  consideration  of  $3.00,  and  that  of  the  defendant  to  pay 

1  Hogg  v.  Laster,  1892,  56  Ark.  382 ;  19  S.  W.  975 ;  Stock  v.  Stoltz, 
1891,  137  111.  349;   27  N.  E.  604;   Walker  ».  Taylor,  1901,  28  Colo. 
233 ;   64  Pac.  192 ;    Reeves'  Estate  v.  Moore,  1892,  4  Ind.  App.  492 ; 
31  N.  E.  44 ;   McClure  v.  Lenz,  1907,  40  Ind.  App.  56 ;   80  N.  E.  988 ; 
Smith  v.  Johnson,  1876,  45  la.  308 ;  Wyley  ».  Bull,  1889,  41  Kan.  206 ; 
20  Pac.  855 ;   Andrus  v.  Foster,  1845,  17  Vt.  556 ;   Martin  v.  Martin, 
1900,  108  Wis.  284;  84  N.  W.  439;  81  Am.  St.  Rep.  895. 

2  Keegan  v.  Estate  of  Malone,  1883,  62  la.  208 ;  17  N.  W.  461. 

3  Rhodes  v.  Stone,  1892,  63  Hun  624 ;  17  N.  Y.  Supp.  561 ;  Swires  v. 
Parsons,  1843,  5  Watts  &  S.  (Pa.)  357. 

"When  the  relation  of  concubinage  is  incidental,  and  is  not  the 
motive  and  cause  of  the  parties  living  together,  the  concubine  can  re- 
cover from  the  estate  of  the  deceased,  if  it  has  been  enriched  by  her  in- 
dustry."—Succession  of  Llula,  1892,  44  La.  Ann.  61,  63;  10  So.  406. 
See  also  Succession  of  Pereuilhet,  1871,  23  La.  Ann.  294,  295;  8  Am. 
Rep.  595,  where  the  court  said :  "An  employer  cannot  pay  off  a  female 
employee  by  robbing  her  of  her  virtue." 

4  Parker's  Heirs  v.  Parker's  Admr.,  1859,  33  Ala.  459 ;  Page  v.  Page, 
1905,  73  N.  H.  305;   61  Atl.  356;   Moyer's  Appeal,  1886,  112  Pa.  St. 
290;  3  Atl.  811;  Williams  ».  Williams,  1902,  114  Wis.  79;  89  N.  W. 
835. 

6  Rupley  v.  Daggett,  1874,  74  111.  351,  (mistake  as  to  price  of  mare). 
6  1880,  24  Kan.  38 ;  36  Am.  Rep.  251. 

85 


§  52]  MISRELIANCE   ON  NON-EXISTENT  CONTRACT        [Part  I 

$1.50  for  such  work,  it  is  obvious  that  neither  promise  was 
supported  by  the  consideration  which  it  required  and  that  the 
contract  was  therefore  void.  But  the  plaintiff  having  rendered 
services  in  reliance  upon  the  supposed  contract  right  to  com- 
pensation was  justly  held  to  be  entitled  to  restitution  in  value 
to  the  extent  of  the  benefit  derived  by  the  defendant  therefrom.1 

If  the  ambiguity  relates  to  the  identity  of  the  subject  matter 
of  an  offer  rather  than  to  its  terms,  the  same  result  follows. 
Thus,  where  it  appeared,  in  a  contract  for  the  sale  of  cotton 
"  ex  Peerless  from  Bombay,"  that  there  were  two  vessels 
bearing  the  name  Peerless  sailing  from  Bombay,  and  that 
the  seller  had  in  mind  one  ship  and  the  buyer  the  other,  the 
contract  was  void.2  But  if  it  had  further  appeared  that  prior 
to  the  discovery  of  the  misunderstanding  and  in  reliance  upon 
the  supposed  contract  the  buyer  had  paid  the  whole  or  a  por- 
tion of  the  purchase  price  of  the  cotton,  the  seller  would  have 
been  under  an  obligation  to  refund.3 

So  long  as  the  transaction  rests  in  parol,  it  may  be  shown 
that  the  offeree,  in  accepting  the  ambiguous  offer,  placed  upon 
it  the  same  interpretation  as  the  offerer,  in  which  case,  of 
course,  the  contract  would  be  valid  and  no  quasi  contractual 
obligation  would  arise.  But  when  the  ambiguity  is  carried 
into  a  written  instrument,  parol  evidence  will  not  be  admitted 
to  show  what  the  parties  meant  unless  the  ambiguity  is  a 
latent  one,  i.e.  not  apparent  on  the  face  of  the  instrument  but 
resulting  from  extraneous  facts.4  An  example  of  quasi  con- 
tractual obligation  resulting  from  a  patent  ambiguity  in  a 
written  instrument  is  found  in  an  early  Wisconsin  case : 

Cole  v.  Clark,  1851,  3  Finn.  (Wis.)  303:  The  plaintiff, 
in  consideration  of  five  hundred  dollars,  agreed  under  seal  to 

1  Accord:  Peerless  Glass  Co.  v.  Pacific  Crockery,  etc.,  Co.,  1898,  121 
Cal.  641 ;  54  Pac.  101,  ("freight  allowance"  on  sale  of  goods) ;  Tucker 
v.  Preston,  1887,  60  Vt.  473 ;  11  Atl.  726,  (terms  of  employment). 

1  Raffles  v.  Wichelhaus,  1864,  2  Hurl.  &  C.  906. 

3  See  De Wolff  v.  Howe,  1906,  112  App.  Div.  104;  98  N.  Y.  Supp. 
262,  (sale  of  goods ;  mistake  in  sampling  order). 

4  See  Wigmore,  "Evidence,"  §§  2470-2473. 

86 


Chap.  IV]  ACCEPTANCE   OF   OFFER  WANTING  [§  53 

put  in  two  waterwheels,  "to  drive  each  a  run  of  stone  in  the 
flouring  mills,  and  warrant  the  same,  with  two  hundred  inches 
of  water  to  each  wheel,  to  be  measured  at  the  bottom  of  the 
flume,  to  grind  fifteen  bushels  per  hour."  The  county  judge 
charged  the  jury  that  if  they  found  that  both  run  of  stone  would 
grind  the  fifteen  bushels  per  hour,  the  plaintiff  had  complied 
with  the  requirements  of  his  contract.  But  the  Supreme  Court 
declared  itself  unable  to  take  that  view.  "On  the  contrary," 
said  HUBBELL,  C.J.  (p.  305),  "we  are  all  of  the  opinion  that 
it  is  too  indefinite  and  uncertain  to  admit  of  any  interpretation 
as  a  matter  of  law.  The  offer  to  introduce  oral  evidence  to 
explain  the  understanding  of  the  parties  was  properly  rejected. 
Such  evidence  is  admissible  when  there  is  a  latent  ambiguity, 
which  is  made  to  appear  by  extraneous  facts,  and  which  may  be 
made  clear  by  parol  proof.  But  the  ambiguity  in  this  case  is 
patent;  it  appears  on  the  face  of  the  instrument;  and  it  arises 
not  from  the  use  of  words  of  art,  or  technical  phrases,  nor 
from  the  existence  of  any  custom  or  usage,  but  from  the  failure  of 
the  parties  so  to  use  common  and  plain  words  as  to  express  any 
definite  idea.  They  have  not  told  us  themselves  what  they  did 
mean ;  whether  each  run  of  stone  was  to  grind  fifteen  bushels 
per  hour,  or  whether  both  were  to  do  it,  and  so  their  instrument 
is  wholly  void.  The  judgment  of  the  county  court  must  be 
reversed  for  this  cause,  and  the  case  must  go  back  for  a  new 
trial.  The  plaintiff  then  can  recover  quantum  meruit  upon 
the  common  counts,  and  no  more." 

§  53.  Same :  (2)  Because  of  offeree's  ignorance  of  offer.  — 
One  who  knows  or  has  reason  to  believe  that  compensation  is 
expected  for  goods  or  services  tendered  him  ought  not  to  accept 
such  goods  or  services  unless  he  intends  to  pay  for  them.  Con- 
sequently, though  he  does  not  expressly  promise  to  pay  for  them, 
the  act  of  acceptance  will  be  construed  as  a  promise  of  pay- 
ment and  will  ordinarily  result  in  a  genuine  contractual  obliga- 
tion. But  what  if  one  accepts  goods  or  services  without 
knowledge  or  reason  to  believe  that  compensation  is  expected  ? 
The  act  of  acceptance,  under  the  circumstances,  cannot  fairly 
be  said  to  raise  an  implied  promise.  But  if  the  person  who 
tenders  the  goods  or  services  actually  intends  to  charge  for 

87 


§  55]  MISRELIANCE  ON  NON-EXISTENT  CONTRACT        [Part  I 

them,  and  mistakenly  believes  that  the  recipient  is  aware  of 
such  expectation  and  therefore  that  the  act  of  acceptance  is 
to  be  construed  as  a  promise  to  pay,  the  benefit  resulting  from 
the  receipt  of  the  goods  or  services  is  clearly  a  benefit  conferred 
in  misreliance  upon  a  supposed  contract.  Whether  or  not 
the  law  requires  such  a  benefit  to  be  restored  depends  upon 
certain  circumstances  affecting  the  justice  of  such  a  require- 
ment, hereafter  to  be  considered  (post,  §  57). 

§  54.  Same :  (3)  Because  of  mistake  as  to  identity  of  offerer. 
—  A  transaction  which  is  intended  by  both  parties  to  effect 
the  formation  of  a  contract 'may  fail  of  its  purpose  by  reason 
of  the  offeree's  mistake  as  to  the  identity  of  the  offerer.  For 
example,  if  A  delivers  ice  to  B,  which  B  accepts  and  consumes 
in  the  reasonable  belief  that  it  comes  from  C,  there  is  no  con- 
tract.1 A's  tender  of  the  ice  amounts  to  an  offer,  but  B's 
acceptance  of  the  ice  in  the  belief  that  it  is  supplied  by  C  amounts 
to  a  promise  to  pay  C  and  not  A.  A,  however,  has  conferred  a 
benefit  upon  B  in  reliance  upon  a  supposed  contract,  and 
unless  peculiar  circumstances  justify  the  retention  of  the 
benefit  (post,  §  55),  quasi  contractual  obligation  will  result. 

§  55.  Same  :  (4)  Circumstances  justifying  retention  of  bene- 
fit. —  Under  some  circumstances  the  recipient  of  a  benefit  con- 
ferred in  reliance  upon  a  supposed  contract  which  turns  out  to 
be  non-existent  because  the  offer  was  never  actually  accepted 
may  justly  decline  to  make  restitution.  Whether  or  not  this 
right  to  retain  the  benefit  exists  in  a  given  case  depends  upon 
the  answer  to  the  following  questions : 

(a)  Did  the  recipient  of  the  benefit  know  or  have  reason  to 
believe  that  compensation  was  expected? 

(6)  If  not,  has  that  which  was  received,  or  in  case  of  money, 
its  application,  saved  him  from  the  expenditure  of  money  or 
the  assumption  of  pecuniary  obligation? 

It  should  be  noted,  however,  that  if,  or  as  long  as,  the  benefit 
conferred  may  be  returned  in  specie,  the  obligation  to  restore 

1  See  Boston  Ice  Co.  ».  Potter,  1877,  123  Mass.  28;  25  Am.  Rep.  9, 
(which,  however,  as  will  be  seen  later,  differs  materially  from  the  case 
supposed) ;  Barnes  v.  Shoemaker,  1887,  112  Ind.  512;  14  N.  E.  367. 

88 


Chap.  IV]  ACCEPTANCE   OF   OFFER  WANTING  [§  56 

is  unaffected  by  these  considerations.  For  whether  or  not  the 
benefit  was  believed  to  be  a  gift,  and  whether  or  not  it  would 
have  been  acquired  by  contract,  had  it  not  been  believed  to 
be  a  gift,  the  fact  that  it  was  conferred  in  misreliance  upon  a 
supposed  right  to  compensation  makes  its  retention  in  specie, 
after  the  discovery  of  the  mistake,  clearly  unjust.  But  if  the 
thing  received  is  consumed,  as  may  happen,  for  example,  in 
the  case  of  household  provisions,  or  is  of  such  a  character  that 
it  cannot  in  the  nature  of  things  be  returned  in  specie,  as  in 
the  case  of  services  rendered,  the  justice  of  refusing  restitution 
in  value  depends  upon  the  answer  to  the  questions  above 
stated. 

§  56.  Same :  (a)  When  defendant  knows  that  compensation 
is  expected :  Boston  Ice  Co.  v.  Potter.  —  As  has  been  said 
(ante,  §  54),  while  the  acceptance  of  the  goods  or  services  by 
one  who  knows  or  has  reason  to  believe  that  he  is  expected  to 
pay  for  them  will  be  held  to  indicate  an  intention  to  pay,  it 
may  happen  that,  because  of  a  mistake  as  to  the  identity  of 
the  offerer,  no  contractual  relation  is  established.  In  such  a 
case  the  fact  that  it  is  impossible  to  return  in  specie  that  which 
was  received  does  not  justify  a  refusal  to  pay  for  it,  and  unless 
the  person  conferring  the  benefit  is  guilty  of  officiousness, 
restitution  in  value  should  be  enforced.1 

The  well-known  case  of  Boston  Ice  Co.  v.  Potter2  is  an 
interesting  one  in  this  connection.  The  action  was  for  ice 
sold  and  delivered.  It  appeared  "  that  the  defendant,  in  1873, 
was  supplied  with  ice  by  the  plaintiff,  but,  on  account  of  some 
dissatisfaction  with  the  manner  of  supply,  terminated  his  con- 
tract with  it;  that  the  defendant  then  made  a  contract  with 
the  Citizens'  Ice  Company  to  furnish  him  with  ice ;  that  some 
time  before  April,  1874,  the  Citizens'  Ice  Company  sold  its 
business  to  the  plaintiff,  with  the  privilege  of  supplying  ice  to 

1  See  John  Weber  &  Co.  v.  Hearn,  1900,  49  App.  Div.  213 ;  63  N.  Y. 
Supp.  41,   (Defendant   thought  he  was   dealing  with  a  partnership, 
though  in  fact  dealing  with  a  corporation.     Recovery  on  contract.) ; 
Brightman  Bros.  v.  Griffin  &  Co.,  1908,  70  Atl.  1057  (R.  I.),  (Plaintiffs 
were  doing  business  under  two  firm  names). 

2  1877,  123  Mass.  28,  30 ;  25  Am.  Rep.  9. 

89 


§  56]  MISRELIANCE  ON  NON-EXISTENT  CONTRACT        [Part  I 

its  customers ; "  that  for  one  year  thereafter  the  plaintiff 
supplied  ice  to  the  defendant,  which  ice  was  accepted  and  used 
by  the  defendant;  and  that  the  defendant  received  no  notice 
of  the  sale  of  the  Citizens'  Ice  Company's  business  and  the 
assignment  of  its  contracts  to  the  plaintiff  until  after  all  the 
ice  had  been  delivered.  The  court  held  that  the  plaintiff  could 
not  recover,  and  ENDICOTT,  J.,  in  the  course  of  his  opinion, 
said: 

"A  party  has  a  right  to  select  and  determine  with  whom  he 
will  contract,  and  cannot  Jiave  another  person  thrust  upon 
him  without  his  consent.  It  may  be  of  importance  to  him  who 
performs  the  contract,  as  when  he  contracts  with  another  to 
paint  a  picture,  or  write  a  book,  or  furnish  articles  of  a  par- 
ticular kind,  or  when  he  relies  upon  the  character  or  qualities 
of  an  individual,  or  has,  as  in  this  case,  reasons  why  he  does 
not  wish  to  deal  with  a  particular  party.  In  all  these  cases,  as 
he  may  contract  with  whom  he  pleases,  the  sufficiency  of  his 
reasons  for  so  doing  cannot  be  inquired  into.  If  the  defendant, 
before  receiving  the  ice,  or  during  its  delivery,  had  received  no- 
tice of  the  change,  and  that  the  Citizens'  Ice  Company  could 
no  longer  perform  its  contract  with  him,  it  would  have  been 
his  undoubted  right  to  have  rescinded  the  contract  and  to  de- 
cline to  have  it  executed  by  the  plaintiff.  But  this  he  was 
unable  to  do,  because  the  plaintiff  failed  to  inform  him  of  that 
which  he  had  a  right  to  know.  If  he  had  received  notice  and 
continued  to  take  the  ice  as  delivered,  a  contract  would  be  im- 
plied." 

This  raises  an  interesting  question  in  quasi  contracts.  If 
A  renders  a  benefit  to  B  with  the  intention  of  charging  for  it, 
and  B,  reasonably  believing  that  he  is  dealing  with  C,  accepts 
the  benefit  with  the  intention  of  paying  for  it,  does  the  fact 
that  A  is  a  person  with  whom  B  for  some  reason  does  not  wish 
to  deal,  justify  B  in  refusing,  when  he  learns  the  truth,  to  make 
restitution?  Before  considering  this  question,  however,  it 
may  be  noted  that  it  was  not  necessarily  involved,  apparently, 
in  Boston  Ice  Co.  v.  Potter.  A  contract  to  supply  ice, 
such  as  the  one  in  that  case,  is  clearly  assignable  by  the 

90 


Chap.  IV]  ACCEPTANCE   OF   OFFER  WANTING  [§  56 

seller.1  And  since  the  doctrine  that  one  "has  a  right  to  select 
and  determine  with  whom  he  will  contract"  applies  only  to  the 
formation  of  contracts  and  in  no  way  affects  their  assignability, 
the  buyer  must  recognize  the  assignee  whether  he  wishes  to 
deal  with  him  or  not.  Had  the  plaintiff,  then,  framed  its 
pleadings  upon  the  theory  that  it  was  the  assignee  of  the  Citizens' 
Ice  Company  —  sueing  in  the  name  of  the  assignor  as  was  at 
that  time  required  in  Massachusetts  2  —  it  would  have  been  en- 
titled to  judgment.  It  thus  appearing  that  the  plaintiff  had 
a  valid  and  enforceable  contract  right  to  compensation  for  the 
ice  supplied  by  him,  there  was  no  occasion  for  raising  a  quasi 
contractual  obligation.3  If,  however,  either  the  contract 
between  the  Citizens'  Ice  Company  and  Potter,  or  the  assign- 
ment to  the  Boston  Ice  Company,  had  for  any  reason  been 
void,  the  case  would  have  presented  the  precise  question  stated 
above  and  now  to  be  considered. 

Two  doctrines  have  been  invoked  to  support  the  view  that 
B  is  under  no  obligation  to  make  restitution : 

1.  That  one  "  has  the  right  to  select  and  determine  with 
whom  he  will  contract  and  cannot  have  another  thrust  upon 
him  without  his  consent." 

2.  That  officiousness  in  the  plaintiff  is  a  defense  to  a  claim 
of  quasi  contractual  liability. 

The  former  doctrine  is  that  relied  upon  by  the  court  in 
Boston  Ice  Co.  v.  Potter.  It  is  vigorously  urged  by  Pro- 
fessor Keener,  as  follows :  "  To  have  allowed  a  recovery  .  .  . 
in  the  Boston  Ice  Company  v.  Potter  would  have  been,  to  use 
the  language  of  Lord  Mansfield  in  Stokes  v.  Lewis  [1785, 
1  Term  R.  20],  to  have  allowed  a  recovery  against  the  defendant 
'  in  spite  of  his  teeth '  and  would  have  been  entirely  destructive 
of  the  doctrine  that  a  man  has  the  right  to  select  his  creditor."4 
But  it  is  putting  the  doctrine  too  broadly  to  say  that  a  man 

1  Woodward,  "Assignability  of  Contract,"  18  Harv.  Law  Rev.  23. 

2  See  Foss  v.  Lowell,  etc.,  Bank,  1873,  111  Mass.  285. 

3  See  article  by  Professor   Costigan  in   7  Columbia  Law  Rev.  32, 
in  which  the  case  of  Boston  Ice  Co.  v.  Potter  is  thoroughly  analyzed  and 
considered. 

4  "Quasi-Contracts,"  pp.  360,  361. 

91 


§  56]  MISRELIANCE   ON   NON-EXISTENT  CONTRACT        [Part  I 

has  a  right  to  select  his  creditor  —  using  the  term  in  its  ordinary 
meaning.  If  that  were  true,  as  Professor  Costigan  has  said, 
it  "  would  be  entirely  destructive  of  the  law  of  quasi  contracts ; 
for  a  plaintiff  is  never  selected  by  the  defendant  as  his  quasi 
contract  creditor."  1  And  while  it  is  true  that  one  has  a  right 
to  determine  with  whom  he  will  contract,  that  is  obviously 
a  doctrine  which  applies  only  to  the  formation  of  geninue 
contracts.  It  is,  in  fact,  only  another  way  of  saying  that 
genuine  contracts  rest  upon  mutual  assent. 

The  latter  doctrine  —  that  the  plaintiff's  officiousness  is 
a  defense  to  a  claim  of  quasi  contractual  liability  —  while 
not  referred  to  in  Boston  Ice  Co.  v.  Potter,  is  suggested  by 
Professor  Keener  in  his  discussion  of  that  case.2  It  is,  of 
course,  a  recognized  doctiine  of  quasi  contract  that  an  officious 
intermeddler,  though  he  enrich  another,  may  be  denied  resti- 
tution (post,  §  196).  But  the  mere  fact  that  A  is  persona  non 
grata,  or  that  for  some  other  reason  B  does  not  wish  to  deal  with 
him,  is  insufficient,  without  other  evidence,  to  convict  A  of  officious 
meddling.  Knowledge  of  B's  feeling,  on  the  part  of  A,  must 
also  be  shown,  and  even  then  the  proof  may  not  be  conclusive. 
Let  it  be  supposed,  for  example,  that  A  is  aware  of  B's  feeling, 
but  confers  the  benefit  in  performance  of  a  contract,  believed 
to  be  valid,  between  B  and  C,  of  which  he  is  the  assignee. 
Is  A  guilty  of  officiousness?  Under  some  circumstances,  no 
doubt,  it  would  be  an  impertinence  for  A  to  acquire  by  assign- 
ment a  contract  with  B,  who,  to  his  knowledge,  does  not  wish 
to  deal  with  him.  Under  other  circumstances,  as  for  instance 
where  the  assignment  of  the  contract  is  involved  in  the  sale 
of  a  business  or  is  taken  in  satisfaction  of  a  debt,  the  act  would 
be  entirely  free  from  impropriety.  Rarely,  it  is  believed, 
would  it  be  fair  to  regard  the  purchase  and  performance  of 
the  contract  by  A  as  conduct  so  inexcusably  officious  as  to 
justify  B  in  refusing  to  make  restitution. 

It  may  be  argued  that  whether  or  not  A's  purchase  of  the 
contract  }s  reprehensible,  he  is  plainly  delinquent  in  failing  to 

1  7  Columbia  Law  Rev.  45  n. 

2  ."Quasi-Contracts,"  p.  360. 

92 


Chap.  IV]  ACCEPTANCE   OF   OFFER  WANTING  [§  57 

notify  B  of  the  fact  that  he  has  replaced  the  original  con- 
tractor, C.  This  point  is  the  one  relied  upon  by  Professor  Keener 
to  support  his  conclusion  that  the  plaintiff  in  Boston  Ice  Co.  v. 
Potter  was  officious.  "  This  case  differs  from  the  case  of 
Boulton  v.  Jones,"  1  he  says,  "  in  that  the  plaintiff  knew  that 
the  defendant  did  not  desire  to  deal  with  him,  and  was,  there- 
fore, officious  in  supplying  him  with  ice  without  notifying  him 
of  that  fact."  2  But  what  is  there  to  suggest  to  A,  under  the 
circumstances,  that  he  owes  a  duty  to  reveal  the  fact?  When 
it  is  remembered  that  he  believes  himself  to  be  the  assignee  of 
a  valid  contract,  and  consequently  that  B  cannot  avoid  deal- 
ing with  him  even  if  informed  of  the  assignment,  it  will  be  seen 
that  he  would  feel  no  obligation  whatever  to  give  B  such  in- 
formation. Moreover,  if,  as  might  well  be,  his  concealment 
of  the  fact  were  prompted  by  consideration  for  the  feelings  of  B, 
he  would  deserve  commendation  rather  than  blame.3 

§  57.  Same  :  (6)  When  defendant  believes  that  compensation 
is  not  expected.  —  Ordinarily,  if  a  benefit  is  conferred  with  the 
intention  of  charging  therefor,  the  circumstances  preclude 
the  recipient  from  subsequently  claiming  with  reason  that  he 
believed  that  no  compensation  was  expected.  Occasionally, 
however,  a  benefit  so  conferred  may  be  accepted  in  the  reason- 
able belief,  either  that  it  is  a  gift,  or  that  for  some  other  reason 
payment  will  not  be  required.  To  take  a  simple  example, 
let  it  be  supposed  that  A  sends  a  barrel  of  apples  to  B,  reason- 
ably expecting,  as  a  result  of  their  previous  course  of  dealing, 
that  B  will  return  the  goods  if  he  does  not  wish  to  purchase 
them;  but  B,  as  a  result  of  misinformation  to  the  effect  that 
A  is  giving  a  barrel  of  apples  to  each  of  his  customers,  accepts 
the  goods  in  the  belief,  reasonable  under  the  circumstances, 
that  compensation  is  not  expected.  In  such  a  case  the  accept- 
ance of  the  benefit  cannot  be  said  to  evince  an  intent  to  con- 
tract, and  consequently  imposes  upon  the  recipient  no  contract 
obligation.  But  the  benefit  has  been  conferred  in  misreliance 

1  1857,  27  L.  J.  Exch.  117;  s.  c.  2  Hurl.  &  N.  564. 

2  "Quasi-Contracts,"  p.  360.    The  italics  are  the  present  author's. 
8  See  Professor  Costigan's  article,  7  Columbia  Law  Rev.  32,  42. 

93 


§  57]  MISRELIANCE  ON  NON-EXISTENT  CONTRACT        [Part  I 

upon  a  supposed  contract,  and  the  question  arises  —  Is  there 
a  quasi  contractual  obligation  to  make  restitution?  Is  the 
retention  of  the  benefit  unjust  ?  If  the  benefit  may  be  returned 
in  specie,  it  is.  If  the  benefit  may  not  be  returned  in  specie, 
the  answer  must  depend  upon  the  result  of  a  further  inquiry — 
Did  that  which  the  conferee  received,  or,  in  the  case  of  money, 
its  application,  save  him  from  the  expenditure  of  money,  or 
the  assumption  of  pecuniary  obligation?  If  it  did,  a  failure 
to  make  restitution  would  be  a  distinct  injustice,  and  to  refuse 
to  enforce  it  would  be  to  permit  the  recipient  of  the  benefit  to 
profit  by  the  conferrer's  mistake.  If  it  did  not,  there  is  no 
injustice  in  a  refusal  to  make  restitution.  To  compel  resti- 
tution would  be  merely  to  shift  the  burden  of  a  misunder- 
standing from  the  shoulders  of  one  innocent  man  to  those 
of  another. 

Whether  or  not,  in  a  given  case,  the  defendant  has  been  saved 
from  the  expenditure  of  money  or  the  assumption  of  obligation, 
may  be  a  difficult  question.  But  the  plaintiff  should  be  given 
the  benefit  of  a  doubt.  In  other  words,  proof  that  the  defendant 
reasonably  believed  that  no  compensation  was  expected,  together 
with  proof  that  restitution  in  specie  cannot  be  made,  consti- 
tutes no  defense  to  the  charge  of  unjust  enrichment.  It  must 
further  appear  that  the  receipt  of  the  benefit  did  not  save  him 
from  the  expenditure  of  money  or  the  assumption  of  obligation. 
Consequently,  where  there  is  room  for  the  supposition  that  the 
defendant  might  either  have  accepted  the  plaintiff's  goods  or 
services,  or  have  obtained  similar  goods  or  services  elsewhere, 
had  he  known  that  he  would  have  to  pay  for  them,  there  is 
ground  for  requiring  him  to  make  restitution.  Thus,  he  should 
be  compelled  to  pay  for  goods  in  the  nature  of  necessaries  for 
his  family  or  his  business  received  and  consumed  by  him  in 
the  reasonable  belief  that  compensation  was  not  expected. 
But  where  the  only  reasonable  inference  from  the  facts  proven 
is  that  the  defendant  would  not  have  obtained  the  goods  or 
services,  or  similar  goods  or  services,  in  any  event  —  as,  for 
example,  where  the  goods  were  of  a  sort  never  purchased  by  him 
or  his  family  —  a  case  for  enforcing  restitution  is  not  established. 

94 


Chap.  I VI  ACCEPTANCE   OF   OFFER  WANTING  [§  5S 

Again,  in  case  the  benefit  consisted  of  money  which  has  been 
expended,  if  it  may  reasonably  be  supposed  that  the  conferee 
might  have  expended  his  own  money  as  he  expended  that  which 
he  believed  to  be  a  gift,  he  ought  to  be  compelled  to  make  resti- 
tution; but  if  it  clearly  appears  that  he  has  used  the  money 
received  from  the  plaintiff  in  the  purchase  of  luxuries  which 
otherwise  he  would  not  have  obtained,  restitution  should  not 
be  enforced. 

It  may  be  that  the  test  of  the  justice  or  injustice  of  the  de- 
fendant's retention  of  a  benefit,  above  suggested,  is  impracti- 
cable of  application ;  but  it  would  seem  to  present  no  greater 
difficulty  than  is  frequently  encountered  in  determining  whether 
or  not,  under  the  circumstances  of  a  particular  case,  articles 
furnished  to  an  infant  are  necessaries. 

§  58.  Same :  (c)  Concord  Coal  Co.  v.  Ferrin,  and  Boul- 
ton  v.  Jones.  —  A  failure  to  make  the  distinction  pointed 
out  in  the  last  section,  it  is  submitted,  brought  about  an  unjust 
result  in  the  New  Hampshire  case  of  Concord  Coal  Co.  v. 
Ferrin.1  One  Bean,  being  indebted  to  the  defendants  and 
having  been  requested  to  make  payment,  told  the  defendants 
that  Day  (one  of  the  plaintiff  firm)  was  backing  him  and  that 
he  would  get  the  plaintiffs  to  furnish  a  ton  of  coal  for  applica- 
tion as  payment  upon  his  indebtedness;  and  the  defendants 
agreed  to  accept  a  ton  of  coal  in  payment.  Bean  thereupon 
informed  the  plaintiffs  that  the  defendants  wanted  a  ton  of 
coal,  without  saying  anything  about  the  arrangement  he  had 
made  with  them.  The  coal  was  delivered  to  the  defendants 
and  used  by  them  in  their  business.  In  an  action  to  recover 
the  value  of  the  coal  it  was  held  that  the  defendant  was  under 
no  obligation  to  make  restitution.  Said  PARSONS,  J.  : 

"It  is  contended  that  the  plaintiffs  can  recover  because  other- 
wise the  defendants  would  be  unjustly  enriched  at  the  plaintiffs' 
expense.  But  that  fact  is  not  found.  Both  parties  trusted  and 
were  deceived  by  Bean.  If  the  plaintiffs  cannot  recover  of  the 
defendants  for  the  coal,  they  have  a  claim  against  Bean  for  its 

1  1901,  71^  H.  33,  36 ;  51  Atl.  283 ;  93  Am.  St/-Rep.  496. 

95 


§  58]  MISRELIANCE  ON  NON-EXISTENT  CONTRACT        [Part  I 

value ;  while  if  the  defendants  were  obliged  to  pay  for  the  coal, 
they  would  also  have  a  claim  against  Bean  for  the  same  amount. 
It  may  be  assumed  that  Bean  is  worthless.  But  there  4s  no 
equitable  reason  why  the  plaintiffs  rather  than  the  defendants 
should  be  released  from  the  consequences  of  their  trust  in  Bean. 
In, view  of  the  inference  of  freedom  from  fault  which  the  gen- 
eral verdict  gives  for  the  defendants,  the  defendants'  equity  is 
at  least  equal  with  that  of  the  plaintiffs." 

It  is  true  that  in  the  sense  of  freedom  from  responsibility 
for  the  misunderstanding,  the  equities  of  the  parties  were 
equal.  And  if  it  had  been  an  article  of  luxury  that  the  plaintiffs 
delivered  to  the  defendants  and  that  the  defendants  consumed, 
it  might  have  been  a  hardship  to  compel  the  defendants  to 
pay  the  plaintiffs  its  value.  But  it  was  coal  which  was  "  used 
by  them  in  their  business,"  —  something  which  the  defendants 
undoubtedly  would  have  purchased  in  any  event.  True,  they 
might  have  obtained  a  better  grade  of  coali  or  might  have 
purchased  at  a  lower  price,  but  all  the  plaintiffs  asked  was  the 
value  of  the  coal  which  they  in  good  faith  delivered  and  which 
the  defendants  consumed.  To  that  extent,  it  is  submitted, 
they  were  entitled  to  restitution. 

An  English  case,  in  some  respects  similar  to  Concord  Coal 
Co.  v.  Ferrin,  but  in  which  it  is  not  so  clear  that  an  un- 
just result  was  reached,  is  Boulton  v.  Jones.1  It  there  appeared 
that  the  defendant  sent  a  written  order  for  hose  pipe  to  one 
Brocklehurst,  a  hose  pipe  manufacturer,  who  had  that  day, 
unknown  to  the  defendant,  sold  his  stock  in  trade  and  assigned 
his  business  to  the  plaintiff.  The  plaintiff  supplied  the  goods 
without  any  intimation  of  the  change  that  had  taken  place 
in  the  business,  and  when  payment  was  requested  the  goods 
had  been  consumed.  The  defendant,  who  had  a  set-off  against 
Brocklehurst,  refused  to  pay  the  plaintiff,  and  was  sustained 
by  the  court.  Since  the  offer  was  not  accepted  by  the  person 
to  whom  it  was  made,  no  contract  obligation  resulted  from  the 
transaction.  Did  an  obligation  in  quasi  contract  arise?  As- 
suming the  set-off  to  have  been  at  least  equal  to  the  value  of 

1  1857,  2  Hurl.  &  N.  564 ;  27  L.  J.  Exch.  117. 
96 


Chap.  IV]  ASSUMED   FACT   NON-EXISTENT  [§  59 

the  goods  ordered,  it  is  clear  that  the  defendant  did  not  suppose 
that  he  would  have  to  pay  out  money  for  the  goods.  And 
though  it  is  probable  that  he  would  have  purchased  the  goods, 
either  from  the  plaintiff  or  from  some  one  else,  in  any  event, 
the  want  of  evidence  as  to  the  use  to  which  the  goods  were  put 
makes  it  impossible  to  say  with  reasonable  certainty  that  he 
would  have  done  so.  Furthermore,  it  is  not  altogether  clear 
that  the  plaintiff,  when  he  supplied  the  goods,  was  under  any 
misapprehension  as  to  his  legal  rights.  It  was  evident  that 
the  defendant's  offer  was  made  to  Brocklehurst.  Unless, 
therefore,  the  plaintiff  was  ignorant  of  the  fundamental  princi- 
ples governing  the  formation  of  contract,  he  must  have  relied, 
not  upon  the  supposed  contract  right  to  supply  the  goods,  but 
upon  the  defendant's  indifference  as  to  the  source  of  his  supply. 
If  so,  he  assumed  the  risk  of  defendant's  refusal  to  pay,  and 
was  not  entitled  to  relief. 

If  the  set-off  which  the  defendant  had  against  Brocklehurst 
amounted  to  less  than  the  value  of  the  goods  furnished  by  the 
plaintiff,  the  balance  was  clearly  recoverable.  For,  to  the 
extent  of  such  balance,  the  defendant  must  have  expected  to 
pay  out  money  for  the  goods,  and  it  can  hardly  be  said  that  the 
plaintiff  acted  officiously  in  the  premises. 

§  59.  (B)  Assumed  fact  non-existent.  —  If,  in  making  a  con- 
tract, it  is  taken  for  granted  by  both  parties  that  a  certain  fact 
exists,  the  non-existence  of  which  would  make  the  contract 
impossible  of  performance,  and  the  fact  does  not  exist,  the 
contract  is  void.  The  reason  for  this  rule  has  been  variously 
stated.  By  Professor  Harriman  it  is  said  that  the  existence  of 
the  fact  is  a  condition  precedent  to  the  formation  of  the  con- 
tract ; x  by  Professor  Langdell,  that  if  the  fact  upon  which  the 
promise  depends  does  not  exist  there  is  no  promise  at  all.2 
Perhaps  it  is  best  to  say  that,  while  there  is  an  agreement,  the 
law,  in  the  interest  of  justice,  attaches  no  obligation. 

The  existence  of  a  fact  may  be  said  to  be  taken  for  granted 
by  both  parties  only  when  neither  party  assumes  the  risk  of  its 

1  Harriman,  "Contracts,"  §§  305,  306. 

2  Langdell,  "Summary  of  the  Law  of  Contracts,'!  §  28. 

97 


§  60]  MISRELIANCE   ON  NON-EXISTENT  CONTRACT        [Part  I 

non-existence.  Where  one  party  undertakes  that  the  fact 
exists,  he  assumes  the  risk,  and  though  its  non-existence  may 
give  to  the  other  party  the  right  to  rescind  the  contract,  it  will 
not  make  the  contract  void.  Thus,  in  the  case  of  a  sale  of  a 
cargo  supposed  to  be  on  board  a  certain  vessel,  if  the  seller 
engages  that  there  is  a  cargo,  the  non-existence  of  a  cargo  will 
relieve  the  buyer  from  the  obligation  to  pay  the  price,  or,  if 
the  price  is  paid,  will  give  the  buyer  the  right  to  rescind  the 
contract  and  recover  the  price,  but  it  will  not  relieve  the  seller 
from  his  engagement ; *  if  the  seller  does  not  undertake  that 
there  is  a  cargo,  the  existence  of  the  cargo  may  be  said  to  be 
taken  for  granted  by  both  parties,  and  if,  in  fact,  there  is  no 
cargo,  the  contract  is  void.2 

§  60.  Same  :  (1)  Sale  or  lease  of  non-existent  property. — The 
fact  most  frequently  taken  for  granted,  in  the  formation  of 
contracts,  is  the  existence  of  the  subject  matter,  or  the  thing 
concerning  which  the  parties  contract.  Thus,  in  contracts  for 
the  sale  of  specific  personal  property,  its  existence  at  the  time 
of  the  sale  is  generally  assumed.  If  the  property  has  perished 
or  been  destroyed,  the  contract  is  void.3  The  same  view  has 
been  taken  of  the  sale  of  non-existent  realty ; 4  of  the  transfer 
of  void  or  spurious  securities ; 5  of  the  assignment  of  a  void 
lease.6  And  in  all  such  cases,  money  paid  in  misreliance 
upon  the  void  contract  is  recoverable : 

1  Davison  v.  Von  Lingen,  1884,  113  U.  S.  40;  5  S.  Ct.  346. 

2  Couturier  v.  Hastie,  1856,  5  H.  L.  Gas.  673. 

3  Strickland  v.  Turner,  1852,  7  Exch.  208,  (annuity) ;    Couturier  v. 
Hastie,  1856,  5  H.  L.  Cas.  673,  (cargo  of  grain) ;  Gibson  v.  Pelkie,  1877, 
37  Mich.  380,  (judgment);    Edwards  v.  Trinity,  etc.,  R.  Co.,  1909, 
54  Tex.  Civ.  App.  334;    118  S.  W.  572,  575-6,  (gravel  in  the  land) ; 
St.  Louis,  etc.,  R.  Co.  v.  Johnston,  1910,        Tex.  Civ.  App.       ;    125 
S.  W,  61,  62-3,  (rock  in  quarry) ;  Uniform  Sales  Act,  §  7,  subsection  1. 
See  Williston,  "Sales,"  §  161.     See  also  Franklin  v.  Long,  1836,  7  Gill 
&  J.  (Md.)  407,  (slave  who  had  died). 

4  D'Utricht  v.  Melchor,  1789,   1   Dall.   (Pa.)  428.     See,  however, 
Goldman  ».  Hadley,  1909,       Tex.  Civ.  App.       ;   122  S.  W.  282,  (sale 
of  land  between  two  surveys,  where  gap  did  not  exist :  no  recovery  in 
absence  of  fraud). 

5  Young  v.  Cole,  1837,  3  Bing.  N.  C.  724,  (void  bonds). 
8  Martin  ».  McCormick,  1854,  8  N.  Y.  331. 

98 


Chap.  IV]       SALE  OR  LEASE  OP  NON-EXISTENT  PROPERTY      [§  60 

Strickland  v.  Turner,  1852,  7  Exch.  208:  Assumpsit  to 
recover  the  purchase  price  paid  for  an  annuity  payable  during 
the  life  of  a  third  person.  At  the  time  of  the  purchase  the 
third  person  had  died,  so  the  annuity  had  ceased  to  exist. 
POLLOCK,  C.  B.  (p.  217) :  "The  question  between  the  parties 
is  this  —  whether  the  purchase  took  effect  during  the  existence 
of  the  annuity.  If  it  did,  though  but  for  an  instant,  the  plain- 
tiff is  not  entitled  to  succeed ;  for  he  purchased  the  annuity, 
and  cannot  complain  that  in  so  doing  he  made  a  bad  bargain, 
as  the  events  have  turned  out.  But  if,  on  the  contrary,  the 
annuity  has  ceased  to  exist  before  his  purchase,  then  he  has 
got  nothing  for  his  purchase  money,  and  is  entitled  to  recover  it 
back.  ..." 

Martin  v.  McCormick,  1854,  8  N.  Y.  331:  Action  by  the 
owner  of  land  to  recover  money  paid  in  consideration  of  the 
assignment  to  him  of  a  lease  given  to  the  defendant  by  a  third 
party.  It  appeared  that  the  lease  was  void,  a  fact  unknown 
to  both  parties  at  the  time  of  the  assignment.  JOHNSON,  J. 
(p.  334) :  "  The  parties  did  not  deal  with  each  other  upon  the 
footing  of  the  compromise  of  a  doubtful  or  doubted  claim,  but 
upon  the  ground  of  a  conceded  right  in  the  defendant.  He 
was  assumed  by  both  of  them  to  have  become  the  owner  of  a 
term  for  one  hundred  years  in  the  premises  in  question,  and  the 
parties  dealt  with  each  other  upon  that  basis  for  the  sale  and 
purchase  of  that  interest.  .  .  .  Now  the  term  which  was  the 
subject  of  the  contract,  contrary  to  the  supposition  of  both 
parties,  had  no  existence,  and  in  all  that  class  of  cases  where 
there  is  mutual  error  as  to  the  existence  of  the  subject  matter 
of  the  contract,  a  recision  may  be  had."  x 

1  Accord:  Jones  v.  Ryde,  1814,  5  Taunt,  488,  (navy  bill  void  because 
of  alteration) ;  Young  v.  Cole,  1837,  3  Bing.  N.  C.  724,  (Guatamala 
bonds  void  because  not  properly  stamped) ;  Gompertz  v.  Bartlett,  1853, 
2  El.  &  Bl.  849,  (bill  of  exchange  thought  to  be  a  foreign  bill  but  in  fact 
a  domestic  bill  and  consequently  unavailable  for  want  of  a  stamp) ; 
Franklin  ».  Long,  1836,  7  Gill  &  J.  (Md.)  407,  (slave  who  had  died) ; 
Young  v.  Adams,  1810,  6  Mass.  182,  (counterfeit  bill) ;  Brewster  v. 
Burnett,  1878,  125  Mass.  68 ;  28  Am.  Rep.  203,  (counterfeit  bonds) ; 
McGoren  v.  Avery,  1877,  37  Mich.  119,  (void  certificate  of  execution 
sale) ;  Wood  ».  Sheldon,  1880,  42  N.  J.  L.  421 ;  36  Am.  Rep.  523,  (void 
dividend  certificate) ;  D'Utricht  v.  Melchor,  1789,  1  Dall.  (Pa.)  428, 
(non-existent  land) ;  Hurd  v .  Hall,  1860,  12  Wis.  125,  (void  school  land 
certificates) ;  Paul  v.  Kenosha,  1867,  22  Wis.  256 ;  94  Am.  Dec.  598, 

99 


§  61]  MISRELIANCE   ON  NON-EXISTENT  CONTRACT        [Part  I 

Closely  analogous  to  cases  of  the  sale  of  goods  which  have 
been  destroyed  is  that  of  Ketchum  v.  Catlin,1  where  in  the 
sale  of  produce  it  was  assumed  that  the  goods  were  at  a  certain 
place,  whereas  in  fact  they  were  elsewhere.  In  an  action  to 
recover  the  amount  paid  upon  the  purchase  price,  the  court 
said: 

"  The  plaintiff,  in  this  case,  wanted  the  property  he  contracted 
for  at  Whitehall,  and  not  at  Boston;  and  it  was  upon  the 
supposition,  that  he  was  to  receive  the  property  at  Whitehall, 
that  he  entered  into  the  contract.  We  think  this  was  material ; 
and  that  without  it  the  contract  would  not  have  been  made; 
and  if  so,  the  right  of  property  did  not  pass  from  Catlin  to  the 
plaintiff.  When  it  was  discovered,  that  the  parties,  in  making 
this  contract,  had  proceeded  upon  a  mutual  mistake  as  to  the 
situs  of  the  property,  they  mutually  had  the  privilege  of  being 
remitted  to  their  original  rights." 

§  61.  Same  :  (2)  Insurance  of  non-existent  risk.  —  Upon  the 
same  principle  as  governs  the  cases  considered  in  the  preceding 
section,  premiums  paid  on  a  policy  of  marine  kisurance  by  one 
who  in  reality  had  no  goods  on  board,  or  for  a  voyage  that  was 
never  begun,  have  been  held  recoverable.  The  existence  of 
a  risk  is  assumed  by  both  parties,  whereas  in  fact  there  is  no 
risk  and  consequently  nothing  to  which  the  contract  of  insurance 
can  attach : 2 

Martin  v.  Sitwell,  1692, 1  Shower  156 :  Indebitatus  assump- 
sit  to  recover  a  premium  paid  for  the  plaintiff  on  a 
policy  of  marine  insurance,  the  plaintiff  having  had  no 

(void  bonds).  And  see  Tucker  v.  Denton,  1907,  106  S.  W.  280  (Ky.), 
where  it  was  held  that  money  paid  for  the  cancellation  of  a  contract 
for  the  purchase  of  land,  supposed  by  both  parties  to  be  enforceable  but 
in  reality  unenforceable  under  the  Statute  of  Frauds,  might  be  re- 
covered. 

1  1849,  21  Vt.  191,  195. 

2  The  same  is  true,  of  course,  where  property  insured  has  perished  or 
has  been  destroyed  before  the  making  of  the  contract.     In  such  a  case 
the  contract  of  insurance  is  not  valid  unless  it  is  antedated  and  both 
parties  are  ignorant  of  the  loss.      See   Hallock  v.  Ins.  Co.,  1857,  26 
N.  J.  L.  268;  Hughes  v.  Ins.  Co.,  1873,  44  How.  Pr.  (N.  Y.),  351. 

100 


Chap.  IV]  INSURANCE   OF   NON-EXISTENT   RISK  [§  61 

goods  on  board.  HOLT,  C.J.  (p.  157) :  "And  as  to  our  case 
the  money  is  not  only  to  be  returned  by  the  custom,  but  the 
policy  is  made  originally  void,  the  party  for  whose  use  it  was 
made  having  no  goods  on  board ;  so  that  by  this  discovery  the 
money  was  received  without  any  reason,  occasion,  or  considera- 
tion, and  consequently  it  was  originally  received  to  the  plain- 
tiff's use."  1 

Stevenson  v.  Snow,  1761,  3  Burr.  1237:  Action  for  money 
had  and  received  to  recover  part  of  a  marine  insurance  premium. 
The  voyage  was  to  be  from  London  to  Halifax,  with  convoy 
from  Portsmouth  to  Halifax,  but  when  the  vessel  reached 
Portsmouth,  the  convoy  had  gone.  WILMOT,  J.  (p.  1241) : 
"  If  the  risque  was  once  begun,  the  insured  shall  not  deviate  or 
return  back,  and  then  say  'I  will  go  no  farther  under  this  con- 
tract, but  will  have  my  premium  returned.'  But  upon  this 
policy,  there  are  two  distinct  points  of  time,  in  effect  two  voyages, 
which  were  clearly  in  the  contemplation  of  the  parties :  and 
only  one  of  the  two  voyages  was  made;  the  other,  not  at  all 
entered  upon.  It  was  a  conditional  contract ;  and  the  second 
voyage  was  not  begun.  Therefore  the  premium  must  be  re- 
turned :  for  upon  this  second  part  of  the  voyage,  the  risque 
never  took  place  at  all."  2 

In  McCulloch  v.  Royal  Exchange  Assurance  Co.3  it  was 
held  that  one  who  had  insured  a  vessel  under  the  mistaken 
supposition  that  he  was  the  owner,  could  not,  in  an  action  com- 
menced after  the  completion  of  the  voyage,  recover  the  pre- 
miums paid  for  such  insurance.  The  court  conceded  that 
if  the  mistake  had  been  discovered  and  the  return  of  the  pre- 
mium demanded  before  the  commencement  of  the  voyage,  the 
plaintiff  would  have  succeeded;  but  declared  that  to  enforce 
a  demand  made  after  the  arrival  of  the  vessel  "  would  place 
underwriters  in  a  very  awkward  situation."  If  it  had  in  fact 
appeared  that  the  defendant  had  so  altered  its  position  that  to 
return  the  premium  would  involve  it  in  a  loss,  restitution  would 

1  Accord:    Toppan  v.  Atkinson,  1807,  2  Mass.  365;    Steinback  v. 
Rhinelander,  1803,  3  Johns.  Gas.  (N.  Y.)  269. 

2  See  Steinback  v.  Rhinelander,  1803,  3  Johns.  Gas.  (N.  Y.)  269. 

3  1813,  3  Camp.  406,  410. 

101 


§  02]  MISRELIANCE  ON  NON-EXISTENT  CONTRACT        [Part  I 

properly  have  been  denied.  But  in  the  absence  of  such  evidence, 
the  delay  in  making  a  demand  would  seem  to  be  immaterial, 
aside  from  the  running  of  the  statute  of  limitations.1 

§  62.  Same :  (3)  Assignment  of  void  patent.  —  The  assign- 
ment of  a  void  patent  presents  a  particularly  interesting  case 
of  the  non-existence  of  the  thing  concerning  which  the  parties 
contract.  Such  an  assignment  purports  to  transfer  the  ex- 
clusive privilege  or  monopoly,  under  grant  of  the  state,  to  make, 
use,  and  vend,  and  to  authorize  others  to  make,  use,  and  vend, 
the  subject  matter  of  an  invention.  If  for  any  reason  the  grant 
of  the  patent  is  void,  the  exclusive  privilege  or  monopoly  does 
not  exist.  And  since  there  is  no  implied  warrant  of  the  validity 
of  the  grant,2  it  ought  to  be  held  that  the  assignment  is  void 
for  non-existence  of  the  subject  matter,  and  that  money  paid 
in  misreliance  upon  its  validity  may  be  recovered.  Such, 
apparently,  is  the  law  in  the  United  States.3  But  in  England 
and  Canada  it  is  held  that  the  assignment  of  a  patent  is  valid 
and  enforceable  though  the  patent  itself  is  void.4  This  view 
probably  rests  upon  the  theory  that  the  assignment  purports  to 
transfer,  not  a  monopoly,  but  merely  the  assignor's  rights  under 
his  letters  patent,  whatever  they  may  turn  out  to  be,  and  that 
the  assignee  therefore  assumes  the  risk  of  the  invalidity  of  the 


1  See  Keener,    "Quasi-Con tracts,"   p.  118.     And   compare   Stein- 
back  v.  Rhinelander,  1803,  3  Johns.  Gas.  (N.  Y.)  269;   New  Holland 
Turnpike  Co.  v.  Ins.  Co.,  1891,  144  Pa.  St.  541 ;  22  Atl.  923. 

2  Hall  v.  Conder,  1857,  2  C.  B.  N.  S.  22 ;    Hiatt  ».  Twomey,   1836, 
1  Dev.  &  Bat.  Eq.    (21  N.  C.)  315;   3  Robinson,    "Patents,"  §  1232. 

3  In  Darst  v.  Brockway,  1842,  11  Ohio  462,  it  is  held  that  money  paid 
by  the  assignee  may  be  recovered.     Hiatt  v.  Twomey,  1836,  1  Dev.  & 
Bat.  Eq.  (21  N.  C.)  315,  contra.     In  the  following  cases  it  is  held  that 
the  invalidity  of  the  patent  is  a  defense  to  an  action  by  the  assignor 
to  recover  the  purchase  price  or  to  an  action  on  a  note  for  the  purchase 
price:    Dickinson  v.  Hall,  1833,  14  Pick.  (Mass.)  217;    25  Am.  Dec. 
390 ;   Lester  ».  Palmer,  1862,  4  Allen  (Mass.)  145 ;   Harlow  v.  Putnam, 
1878,  124  Mass.  553;    Keith  v.  Hobbs,  1878,  69  Mo.  84;  Herzog   v. 
Heyman,  1897,  151  N.  Y.  587;   45  N.  E.  1127;   Geiger  v.  Cook,  1842, 
3 'Watts  &  S.  (Pa.)  266.     And  see  Hamilton  v.  Park,  1900,  125  Mich. 
72 ;  83  N.  W.  1018. 

4  Hall  v.  Conder,  1857,  2  C.  B.  N.  S.  22 ;   Liardet  v.  Hammond,  etc., 
Co.,  1883,  31  W.  R.  710;  Vermilyea  v.  Canniff,  1886,  12  Ont.  164. 

102 


Chap.  IV]  ASSIGNMENT   OF   VOID   PATENT  [§  62 

grant.1  If  the  assignment  is  so  worded  as  to  indicate  that  the 
parties  regard  the  patent  as  of  doubtful  validity,  such  a  con- 
struction may  be  justified.2  In  the  absence  of  such  evidence 
it  seems  somewhat  strained. 

A  license,  in  the  law  of  patents,  is  not,  accurately  speaking, 
a  transfer  of  the  licensor's  monopoly,  but  a  permit  to  make, 
use,  or  vend  the  thing  patented  under  protection  of  the  patent. 
Essentially  it  is  merely  an.  agreement  by  the  licensor  that  he  will 
not  hinder  or  attempt  to  prevent  the  licensee  from  making, 
using,  or  vending  the  thing  upon  which  the  licensor  claims  a 
monopoly.3  The  validity  of  the  patent  may  be  an  assumed  fact, 
but  it  is  not  a  fact  the  non-existence  of  which  makes  the  contract 
impossible  of  performance,  since  all  that  the  contract  requires 
is  non-interference  by  the  licensor.  Consequently,  though  the 
patent  is  void,  the  license  is  valid  and  enforceable  so  long  as 
the  licensee  continues  without  molestation  to  operate  under  it.4 

1  In  Hall  v.  Conder,  supra,  WILLIAMS,  J.,  said  (p.  42) :  "They  con- 
tracted for  the  patent  such  as  it  was,  each  acting  on  his  own  judgment," 
and  distinguished  the  earlier  case  of  Chanters  v.  Leese,  1838,  4  Mees.  & 
W.  295,  upon  the  ground  that  there  the  assignor  expressly  contracted 
that  the  assignee  should  have  the  exclusive  right  to  sell  certain  things  for 
which  the  patents  had  been  obtained. 

2  See  Johnson  v.  Willimantic  Linen  Co.,  1866,  33  Conn.  436,  in  which 
the  court  said  (  p,  443) :  "Where,  as  in  this  case,  there  is  ...  clear  evi- 
dence on  the  face  of  the  instrument  that  the  parties  mutually  contem- 
plated the  possibility,  if  not  the  probability  that  the  patent  was  invalid, 
and  provided  by  the  form  of  the  instrument  and  its  stipulation  for  the 
contingency,  it  is  very  clear  that  there  is  no  ground  on  which  the  vendee 
can  be  permitted  to  set  up  a  failure  of  consideration."     See  also, 
Gilmore  v.  Aiken,  1875,  118  Mass.  94;    Herzog  v.  Heyman,  1897,  151 
N.  Y.  587 ;  45  N.  E.  1127. 

3  See  Heaton,  etc.,  Co.  v.  Eureka,  etc.,  Co.,  1896,  77  Fed.  288,  290 ; 
25  C.  C.  A.  267 ;  47  U.  S.  App.  146 ;  35  L.  R.  A.  728. 

4  Lawes  v.  Purser,  1856,  6  EU.  &  B.  930 ;    Crossley  ».  Dixon,  1863, 
10  H.  L.  Cas.  293 ;  Holmes  v.  McGffl,  1901,  108  Fed.  238 ;  47  C.  C.  A. 
296;    Rhodes  v.  Ashurst,  1898,  176  111.  351;    52  N.  E.  118;   Jones  v. 
Burnham,  1877,  67  Me.  93 ;   24  Am.  Rep.  10 ;   Standard  Button,  etc., 
Co.  v.  Ellis,  1893,  159  Mass.  448  ;  34  N.  E.  682 ;  Strong  v.  Carver  Cotton 
Gin  Co.,  1907,  197  Mass.  53;   83  N.  E.  328,  330;    14  L.  R.  A.  (N.  S.) 
274 ;    Marston  v.  Swett,  1876,  66  N.  Y.  206 ;    23  Am.  Rep.  43.     See 
also  Ross  v.  Dowden  Mfg.  Co.,  1909,  147  la.  180;   123  N.  W.  182. 

In  many  cases  allowing  the  recovery  of  royalties  under  void  patents, 
the  decision  is  rested  upon  the  doctrine  of  estoppel.  Unless  the  licensee 

103 


.§  63]  MISRELIANCE  ON  NON-EXISTENT  CONTRACT        [Part  I 

It  follows  (upon  the  principle  of  §  18,  ante)  that  royalties  paid 
by  the  licensee  may  not  be  recovered.1 

The  distinction  between  an  assignment  of  a  patent  and  a 
license  has  frequently  been  overlooked.  The  leading  English 
case  of  Taylor  v.  Hare,2  which  held  that  royalties  paid  by 
a  licensee  under  a  void  patent  could  not  be  recovered,  is  crit- 
icised by  Professor  Keener,3  apparently  upon  the  theory  that 
the  licensee  had  bought  "  the  right  to  manufacture  under  the 
letters  patent,"  which  since  the  patent  was  void,  the  licensor 
did  not  have  to  sell.  If  this  is  the  true  theory  of  the  nature 
of  a  license,  the  criticism  is  deserved;  but  as  has  been  said, 
the  courts  have  construed  licenses  to  be  merely  agreements 
by  the  licensor  not  to  interfere  with  the  licensee. 

§  63.  Same  :  (4)  Sale  of  non-existent  or  defective  title.  —  The 
ability  of  one  who  contracts  to  sell  property,  either  real  or 
personal,  to  give  a  good  title,  is  never  regarded  as  a  fact  the 
non-existence  of  which  invalidates  the  contract.  If  the  con- 
tract contains  an  express  or  implied  warranty  of  title,4  the  vendor 
is  liable  in  damages  for  the  breach  of  the  warranty.  Under 
what  circumstances  one  may  elect  to  rescind  a  contract  because 
of  a  breach  by  the  other  party  and  sue  for  restitution  instead 
of  for  damages  is  elsewhere  considered  (post,  §  260  et  seq.). 

has  acknowledged  the  validity  of  the  patent  (as  in  Hyatt  v.  Ingalls, 
1891,  124  N.  Y.  93 ;  26  N.  E.  285),  the  doctrine  would  seem  to  be  inap- 
plicable. 

Even  though  the  license  contains  an  express  stipulation  that  the 
licensee's  privilege  shall  be  exclusive,  it  is  held  that  the  invalidity  of 
the  patent  does  not  invalidate  the  license.  See  Holmes  v.  McGill, 
supra. 

1  Taylor  ».  Hare,  1805, 1  Bos.  &  Pul.  N.  R.  260 ;  Schwarzenbach  v. 
Odorless,  etc.,  Co.,  1885,  65  Md.  34;  3  Atl.  676;  57  Am.  Rep.  301. 

2  1805,  1  Bos.  &  Pul.  N.  R.  260. 

3  "  Quasi-Contracts,"  pp.  37-39. 

4  Ordinarily,  in  a  contract  to  sell  or  a  sale  of  chattels,  there  is  an 
implied  warranty  of  title.    Williston,  "Sales,"  §§  216-220.     The  same 
is  true  of  executory  contracts  for  the  sale  of  land.     Burwell  v.  Jackson, 
1854,  9  N.  Y.  535 ;  Seld.  Notes  243 ;  Moore  v.  Williams,  1889, 115  N.  Y. 
586,  592  ;  22  N.  E.  233  ;    Rawle,  "Covenants  for  Title,"  §32.     But  in 
a  conveyance  of  land  there  is  no  implied  warranty.     Dorsey  v.  Jackman, 
1814,  1  Serg.  &  R.  (Pa.)  42;  7  Am.  Dec.  611 ;  Rawle,  "Covenants  for 
Title,"  §  320. 

104 


Chap.  IV]  PROMISE   INDEFINITE  [§  64 

If,  on  the  other  hand,  'the  contract  is  without  warranty  of  title 
express  or  implied,  the  purchaser  is  held  to  have  assumed  the 
risk  of  the  vendor's  inability  to  give  a  good  title  and  conse- 
quently is  without  a  remedy.1 

§  64.  (C)  Promise  indefinite.  —  A  promise  so  general  or 
indefinite  that  it  does  not  enable  the  courts  to  determine  the 
nature  and  extent  of  the  obligation  assumed  must  be  regarded 
as  no  promise  at  all.  Such  has  been  the  fate  of  a  promise  to 
pay  good  wages ; 2  a  promise  to  convey  a  hundred  acres  of  land, 
the  land  not  being  described ; 3  a  promise  to  divide  profits, 
no  rate  of  division  being  indicated.4  Instances  might  be 
multiplied.5  A  benefit  conferred  in  the  honest,  though  mis- 
taken, belief  that  such  a  promise  is  binding  ought  in  justice  to 
be  restored.  Restitution  is  accordingly  enforced : 

Sherman  v.  Kitsmiller,  1827,  17  Serg.  &  R.  (Pa.)  45:  — 
Action  on  a  promise  by  defendant's  intestate  that  in  con- 
sideration that  the  plaintiff  would  live  with  him  until  her 
marriage  he  would  give  her  one  hundred  acres  of  land.  DUN- 
CAN, J.  (p.  49) :  "This  vague  and  void  promise,  incapable  of 
specific  execution,  because  it  has  nothing  specific  in  it,  would 
not  prevent  the  plaintiffs  from  recovering  on  a  quantum  meruit 
for  the  value  of  this  young  woman's  services,  until  her  mar- 
riage. If  this  promise  had  been,  that,  in  consideration  of 
one  hundred  pounds,  the  defendant's  testator  promised  to  con- 
vey her  one  hundred  acres  of  land,  chancery  would  not  decree 
a  specific  performance,  or  decree  a  conveyance  of  any  particular 

1  Dorsey  v.  Jackman,  1814,  1  Serg.  &  R.  (Pa.)  42;  7  Am.  Dec.  611 ; 
Rawle,  "Covenants  for  Title,"  §  321  and  cases  there  cited.     But  see 
Earle  v.  Bickford,  1863,  6  AUen  (Mass.)  549 ;  83  Am.  Dec.  65,  where  it 
was  held  that  one  who  has  undertaken  to  sell  a  part  of  the  estate  of  an 
insolvent  debtor,  as  assignee  thereof,  but  who  by  reason  of  a  want 
of  jurisdiction  in  the  judge  who  assumed  to  act  in  the  case,  had  no  au- 
thority to  do  so,  is  liable  to  the  purchaser  in  assumpsit  for  the  money 
received  as  the  price  thereof.  4 

2  Fairplay  School  Tp.  v.  O'Neal,  1890,  127  Ind.  95;  26  N.  E.  686. 

3  Sherman  v.  Kitsmiller,  1827,  17  Serg.  &  R.  (Pa.)  45. 

4  Young  v.  Farwell,  1893,  146  111.  466 ;    34  N.  E.  373 ;    Butler  v. 
Kemmerer,  1907,  218  Pa.  St.  242 ;   67  Atl.  332. 

8  See  Harriman,  "Contracts,"  §§  29-31;  Am.  Dig.  tit.  Contracts, 
Cent.  Ed.  Vol.  11,  §§  10-20;  Dec.  Ed.  Vol.  5,  §  9. 

105 


§  66]  MISRELIANCE  ON  NON-EXISTENT  CONTRACT        [Part  I 

land ;  yet  the  party  could  recover  back  the  money  he  had  paid 
in  an  action."  l 

§  65.  Same  :  Engagements  of  honor  distinguished.  —  The 
cases  considered  in  the  preceding  section  should  be  distinguished 
carefully  from  those  in  which  the  form  or  character  of  the 
promise  leads  to  the  conclusion  that  the  plaintiff  did  not  rely 
upon  it  as  a  contractual  obligation  but  trusted  the  fairness  and 
liberality  of  the  defendant.  In  the  latter  there  is  not  only  no 
contract,  but  no  misreliance  upon  a  supposed  contract,  and 
consequently  no  legal  obligation  whatever.  Thus,  where  the 
plaintiff  rendered  services  under  an  agreement  that  such  com- 
pensation would  be  made  "  as  shall  be  deemed  right,"  Lord 
ELLENBOROUGH  said :  "  This  was  throwing  himself  upon  the 
mercy  of  those  with  whom  he  contracted,"  and  BAYLEY,  J., 
added :  "it  was  to  be  in  the  breast  of  the  committee  [the 
defendants]  whether  he  was  to  have  anything,  and  if  anything 
then  how  much."  2 

§  66.  (D)  Required  form  wanting.  —  It  is  essential  to  the 
validity  of  certain  contracts  that  they  be  executed  in  a  partic- 

1  Also :  In  re  Vince,  [1892]  2  Q.  B.  478,  (money  lent  in  reliance  upon 
a  contract  void  for  vagueness) ;    Wyman  v.  Passmore,  1910,  146  la. 
486;   125  N.  W.  213;  27  L.  R.  A.  (N.  S.)  683,  (services  rendered  under 
an  agreement  to  pay  proportion  of  the  expense  of  caring  for  one's 
mother) ;   Stout  v.  Carruthersville  Hardware  Co.,  1908,  131  Mo.  App. 
520;    110  S.  W.  619,  620-621,  (goods  sold  under  a  contract  that  "the 
price  charged  would  be  as  cheap  as  they  could  be  bought  anywhere") ; 
Buckley  v.  Wood,  1902,  67  N.  J.  L.  583  ;  52  Atl.  564,  (earnest  money  paid 
in  reliance  upon  a  contract  for  the  purchase  of  land  void  for  uncer- 
tainty) ;   Jacobson  v.  Le  Grange,  1808,  3  Johns.  (N.  Y.)  199,  (services 
rendered  under  a  promise  "to  do  by  him  as  his  own  child  ") ;  Bluemner 
v.  Garvin,  1907,  120  App.  Div.  29 ;    104  N.  Y.  Supp.  1009,  (services 
rendered  in  reliance  upon  a  contract  to  give  "plaintiff  a  fan*  share  of 
defendant's  commissions. ") ;    Garr  v.  Cranney,  1902,  25  Utah  193  ;     70 
Pac.  853, 855,  (services  rendered  in  reliance  upon  a  promise  "to  pay  her 
for  all  she  had  ever  done  or  would  do  for  him") ;  Buck  v.  Pond,  1905, 126 
Wis.  382  ;   105  N.  W.  909,  (services  rendered  in  reliance  upon  a  contract 
for  the  sale  of  land,  too  indefinite  to  be  enforced).     But  see  Leslie  v. 
Smith,  1875,  32  Mich.  64,  (improvements  made  in  reliance  on  indefinite 
contract  to  convey  land). 

2  Taylor  v.  Brewer,  1813,  1  Maul.  &  S.  290,  291.     See  also  Henderson 
Bridge  Co.  v.  McGrath,  1890,  134  U.  S.  260 ;   10  S.  Ct.  730 ;   Kirksey  v. 
Kirksey,  1845,  8  Ala.  131 ;   Erwin  v.  Erwin,  1854,  25  Ala.  236. 

106 


Chap.  IV]  REQUIKED   FORM  WANTING  [§  66 

ular  manner  or  with  prescribed  formalities.1  Thus  it  is  some- 
times required  by  statute  that  certain  contracts  of  municipal 
corporations  shall  be  entered  into  only  upon  sealed  bids  or 
proposals  made  in  compliance  with  duly  authorized  notice.2 
A  failure  to  comply  with  the  statutory  provisions  invalidates  the 
contract.  But  if  services  have  been  rendered  or  materials  sup- 
plied in  misreliance  upon  it,  the  contractor  may  seek  to  recover 
the  value  thereof.  The  case  is  so  closely  related  to  that  of 
a  benefit  conferred  upon  a  corporation  under  a  contract  ultra 
vires  in  its  nature  that  they  will  be  treated  together  in  another 
chapter  (post,  §  154  et  seq.). 

Another  formality,  the  omission  of  which  frequently  makes 
contractual  rights  unavailable,  is  that  of  a  writing  or  written 
memorandum  required  by  the  Statute  of  Frauds.  The  English 
statute  does  not  make  a  writing  essential  to  the  validity  of 
contracts  within  its  purview,  but  merely  provides  that  they 
shall  be  proved  by  written  evidence.3  In  other  words  the 
statute  establishes  a  rule  of  remedial  law  only,  which  is  ex- 
clusively for  the  benefit  of  the  parties  to  the  contract,  and  the 
effect  of  which  is  determinable  by  the  lex  fori  rather  than  the 
lex  loci  contractus.4  In  some  of  the  United  States  the  courts 
have  felt  compelled  by  express  legislative  declarations  to  hold 
that  a  failure  to  comply  with  the  requirements  of  the  statute 
makes  a  contract  void.5  But  in  most  of  the  States  the  contract 
is  held  not  to  be  void  but  merely  unenforceable.6  Unenforcea- 

1  McCaulley  v.  Jenney,  1875,  5  Houst  (Del.)  32,  (omission  of  cor- 
porate seal). 

2  Zottman  v.  San  Francisco,  1862,  20  Cal.  96 ;    81  Am.  Dec.  96  ; 
McDonald  v.  Mayor,  1876,  68  N.  Y.  23 ;   23  Am.  Rep.  144. 

3  Britain  v.  Rossiter,  1879,  11  Q.  B.  D.  123;   Maddison  v.  Alderson, 
1883,  8  A.  C.  467,  488. 

*  Leroux  v.  Brown,  1852,  12  C.  B.  801. 

5  Feeney  v.  Howard,  1889,  79  Cal.  525 ;   21  Pac.  984 ;    12  Am.  St. 
Rep.  162 ;  4  L.  R.  A.  826  ;  Raub  v.  Smith,  1886,  61  Mich.  543  ;  28  N.  W. 
676 ;  1  Am.  St.  Rep.  619 ;  Dung  v.  Parker,  1873,  52  N.  Y.  494 ;  Madigan 
v.  Walsh,  1868,  22  Wis.  501. 

6  Shakespeare  v.  Alba,  1884,  76  Ala.  351 ;  Obear  t>.  First  Nat.  Bank, 
1895,  97  Ga.  587  ;  25  S.  E.  335 ;  33  L.  R.  A.  384 ;  Wheeler  v.  Franken- 
thal,  1875,  78  111.  124 ;  Schierman  v.  Beckett,  1882,  88  Ind.  52 ;  Bird  v. 
Munroe,  1877,  66  Me.  337 ;  22  Am.  Rep.  571 ;   Amsinck  v.  Amer.  Ins. 

107 


§  68]  MISRELIANCE  ON  NON-EXISTENT  CONTRACT        [Part  I 

bility  for  lack  of  admissible  evidence  is  very  different  from 
invalidity,  and  the  quasi  contractual  obligation  which  may  grow 
out  of  contracts  within  the  Statute  of  Frauds  will  therefore  be 
separately  considered  (post,  §  93  et  seq.}. 

§  67.  (E)  Contractual  capacity  wanting.  —  A  contract  possess- 
ing all  the  internal  elements  of  validity  may  be  invalidated  by 
the  fact  that  one  of  the  parties  thereto  is  regarded  by  the  law 
as  incompetent  to  contract.  If  either  party,  however,  in  the 
honest  belief  that  the  contract  is  binding,  performs  it  in  whole 
or  in  part,  a  benefit  resulting  to  the  other  party  therefrom  is 
a  benefit  conferred  in  misreliance  upon  a  non-existent  con- 
tract right.  Assuming  that  the  other  elements  of  quasi  con- 
tractual obligation  are  present,  such  a  benefit  should  be  restored. 

§  68.  Same  :  (1)  Married  women.  —  Chiefly  as  a  result  of  the 
notion  that  the  wife's  personality  was  merged  in  that  of  her 
husband,  a  married  woman  under  the  common  law  was  in 
general  without  contractual  capacity.1  In  equity,  however, 
she  was  permitted  to  make  a  contract  binding  upon  her  separate 
equitable  estate,2  and  in  recent  times  her  contractual  disability 
has  been  almost  entirely  removed  by  legislation.3  Out  of 
attempts  to  enter  into  contracts  which,  in  a  particular  juris- 
diction, she  is  not  permitted  to  make,  the  quasi  contractual 
obligation  to  make  restitution  may  arise.4 

Co.,  1880,  129  Mass.  185 ;  Heaton  v.  Eldridge,  1897,  56  Ohio  St.  87 ;  46 
N.  E.  638 ;  36  L.  R.  A.  817 ;  60  Am.  St.  Rep.  737.  For  additional  cases, 
see  29  Am.  &  Eng.  Ency.  of  Law  (2d  ed.)  814  n. 

As  to  what  law  determines  the  effect  of  the  statute  there  is  a  decided 
conflict  among  the  American  cases.  See  note  to  Wolf  v.  Burke,  19 
L.  R.  A.  792,  and  note  to  Third  Nat.  Bank  v.  Steel,  64  L.  R.  A.  119. 

1  Loyd  v.  Lee,  1718,  1  Str.  94 ;  Marshall  v.  Rutton,  1800,  8  Term  R. 
545 ;  Foster  v.  Wilcox,  1873,  10  R.  I.  443  ;  14  Am.  Rep.  698. 

2  In  re  Leeds  Banking  Co.,  1866,  L.  R.  3  Eq.  781 ;  Pike  v.  Fitzgibbon, 
1881,  17  Ch.  Div.  454 ;   Jacques  v.  Methodist  Episcopal  Church,  1820, 
17  Johns.  (N.  Y.)  548. 

3  See  15  Am.  &  Eng.  Ency.  of  Law  (2d  ed.)  792. 

4  Shearer  v.  Fowler,  1810,  7  Mass.  31,  (deed  void).    And  see  Wilson  v. 
Mullins,  1909,        Ky.         ;   119  S.  W.  1180,  1184;  Nat.  Granite  Bank 
v.  Tyndale,  1900,  176  Mass.  547  ;  57  N.  E.  1022 ;  51  L.  R.  A.  447,  (note 
to  husband  void).     But  see  Muller  v.  Witte,  1906,  78  Conn.  495 ;   62 
Atl.  756. 

108 


Chap.  IV]  CONTRACTUAL   CAPACITY   WANTING  [§  68 

In  a  Massachusetts  case  it  was  held  that  ah  action  for  money 
had  and  received  would  not  lie  against  the  estate  of  a  deceased 
husband  for  the  recovery  of  money  received  by  him  from  his 
wife  upon  his  promise  to  return  it,  or  a  like  sum,  to  her : 

Kneil  v.  Egleston,  1885,  140  Mass.  202;  4  N.  E.  573: 
DEVENS,  J.  (p.  204) :  "It  has,  indeed,  been  held  that,  where  one- 
renders  service  or  conveys  property  as  the  stipulated  consideras- 
tion  of  a  contract  within  the  statute  of  frauds,  if  the  other 
party  refuses  to  perform  and  sets  up  the  statute,  the  value  of 
such  service  or  property  may  be  recovered.  The  obligation 
which  would  arise  from  the  receipt  or  retention  of  value  to 
return  or  pay  for  the  same  is  not  overridden,  because  the  words 
of  a  form  of  a  contract  which  did  not  bind  the  party  repudiating 
it  were  uttered  at  the  time.  Between  parties  competent  to 
contract,  it  is  reasonable  to  infer  that  the  party  failing  to  per- 
form that  which  he  had  agreed  to  do,  and  yet  which  he  might 
lawfully  do,  promised  that,  if  he  availed  himself  of  his  right  of 
rescission,  he  would  return  that  which  he  received,  and  that  the 
value  received  or  retained  by  him  was  so  received  only  on  these 
terms.  In  Bacon  v.  Parker  [137  Mass.  309],  the  parties  were 
competent  to  contract  with  each  other ;  but  the  inference  that,  if 
one  contract  was  repudiated,  another  must  be  inferred,  could  not 
arise  where  parties  were  not  competent  to  make  any  contract." 

The  conclusion  of  the  learned  court  in  this  case  appears  to 
rest  upon  a  misapprehension  of  the  nature  of  quasi  contractual 
obligation.  It  admits  that  one  who  renders  services  or  conveys 
land  under  a  contract  unenforceable  because  of  the  Statute  of 
Frauds  may  recover  the  value  of  such  services  or  property, 
but  distinguishes  that  case  from  the  one  at  bar  by  pointing 
out  that  in  the  former  the  obligation  results  from  an  implied 
promise  by  the  defendant  "  that  if  fce  availed  himself  of  his  right 
of  rescission,  he  would  return  that  which  he  received,"  while  in 
the  latter  no  such  contract  can  be  implied  because  the  parties 
are  incompetent.  As  a  matter  of  fact,  the  obligation  in  both 
cases  rests  not  upon  a  genuine  implied  promise  but  upon  the 
rule  of  law  that  benefits  conferred  in  mistaken  reliance  upon 
an  unavailable  contract  right  are  under  certain  circumstances 

109 


§  69]  MISRELIANCE  ON  NON-EXISTENT  CONTRACT        [Part  I 

recoverable.  The  so-called  promise  is  a  fictional  one,  for  pro- 
cedural purposes  only,  and  the  question  of  the  contractual 
competency  of  the  defendant  is  irrelevant. 

If  an  action  to  recover  a  benefit  conferred  under  a  contract 
between  husband  and  wife  were  brought  by  and  against  the 
original  parties,  it  might  be  contended  that,  regardless  of  their 
substantive  rights,  they  cannot  sue  each  other.  Such  was  the 
rule  at  common  law,  and  in  some  jurisdictions  it  has  not  been 
abrogated.  But  it  is  noticeable  that  in  Kneil  v.  Egleston  both 
husband  and  wife  were  dead,  and  the  issue  arose  between  their 
representatives,  so  that  even  the  procedural  objection  was  un- 
available.1 

§  69.  Same :  (2)  Infants.  —  In  England,  at  the  common 
law,  an  infant's  contract  is  binding  upon  him  if  it  is  for  his 
benefit.2  This  is  also  the  law  in  Rhode  Island ; 3  but  the  general 
rule  in  America  is  that  an  infant's  contract  is  voidable  by  him 
whether  beneficial  or  detrimental.4  Voidability  should  be 
distinguished,  however,  from  voidness  or  invalidity.  A  void 
contract,  accurately  speaking,  is  not  a  contract,  it  is  a  legal 
nullity  ah  initio.  A  voidable  contract  is  one  which,  by  reason 
of  some  fact  tending  to  prevent  one  of  the  parties  from  acting 
with  due  regard  to  his  interest  in  making  it,5  may  be  abrogated 
by  him,  but  which  until  and  unless  it  is  abrogated  subsists  as  a 
valid  legal  obligation.  If  infants  lacked  contractual  capacity,  as 
is  frequently  supposed,  their  contracts,  like  those  of  married 
women  under  the  common  law,  would  be  void.  As  a  matter 


1  For  further  comment  on  this  case,  see  Keener,  "Quasi-Con tracts," 
pp.  336-40. 

2  Clements  v.  London,  etc.,  R.  Co.,  [1894]  2  Q.  B.  482;   Stephens  ». 
Dudbridge  Ironworks  Co.,  [1904]  2  K.  B.  225.     The  common  law  rule 
has  been  largely  altered  by  statute.     See  the  Infants  Relief  Act,  1874, 
(37  &  38  Viet.  c.  62). 

3  Pardey  v.  American  Ship  Windlass  Co.,  1897,  20  R.  I.  147 ;  37  Atl. 
706 ;  78  Am.  St.  Rep.  844. 

4  Cole  v.  Pennoyer,  1852,  14  111.  158 ;    Fetrow  v.  Wiseman,  1872, 
40  Ind.  148 ;  Lemmon  v.  Beeman,  1888,  45  Ohio  St.  505 ;   15  N.  E.  476. 
For  a  collection  of  authorities,  see  22  Cyc.  581,  582.     For  an  exhaustive 
note,  see  18  Am.  St.  Rep.  573. 

8  Harriman,  "Contracts,"  §  399. 

110 


Chap.  IV]  CONTRACTUAL   CAPACITY   WANTING  [§  69 

of  fact,  and  as  is  evidenced  by  their  right  to  enforce  their  con- 
tracts if  they  choose,  they  have  legal  capacity;  and  it  is  by 
reason  of  a  presumed  mental  incapacity  to  safeguard  their  own 
interests  that  they  are  permitted  to  escape  by  avoidance  the 
consequences  of  their  engagements.  It  follows :  first,  that 
any  quasi  contractual  obligation  which  may  rest  upon  one  by 
reason  of  his  own  avoidance  of  a  contract  on  the  ground  of 
infancy  is  an  obligation  to  restore  a  benefit  conferred  in  mis- 
reliance,  not  upon  a  void  contract,  but  upon  a  contract  unavail- 
able because  of  avoidance ;  second,  that  any  quasi  contractual 
obligation  that  may  rest  upon  one  by  reason  of  another's  avoid- 
ance of  a  contract  with  him  on  the  ground  of  infancy  is  an  obliga- 
tion to  restore  a  benefit  obtained  by  what  may  be  termed  a  con- 
structive fraud.  Both  of  these  obligations  —  i.e.  that  of  the 
person  who  avoids  and  that  of  the  other  party — are  fully  treated 
in  works  on  Persons  and  Domestic  Relations  and  require  no 
separate  or  extended  consideration  in  this  book.  For  the 
sake  of  convenience  the  law  may  be  briefly  summarized  as 
follows : 

By  the  weight  of  authority  an  infant  is  not  required  to  return 
the  consideration  received  by  him  as  a  condition  precedent  to 
the  avoidance  of  his  obligation  under  a  contract  and  the  plead- 
ing of  infancy  in  an  action  against  him  to  enforce  it.1  If,  at 
the  time  of  disaffirmance,  however,  he  retains  the  consideration, 
he  becomes  liable  to  restore  it,2  and  such  restoration  is  a  con- 
dition precedent  to  the  right  to  restitution  from  the  other  party.3 
Indeed,  in  the  case  of  the  purchase  of  personal  property  by 
an  infant,  it  is  held  that  the  title  re-vests  upon  his  disaffirmance 

1  Shipley  v.  Smith,  1904,  162  Ind.  526;   70  N.  E.  803;   Chandler  v. 
Simmons,  1867,  97  Mass.  508;   93  Am.  Dec.  117;   Craighead  v.  Wells, 
1855, 21  Mo.  404 ;  Tiffany,  "Persons,"  (2d  ed.)  §  214.   And  see  Simpson  v. 
Prudential  Ins.  Co.  1903,  184  Mass.  348 ;   68  N.  E.  673 ;   63  L.  R.  A. 
741 ;   100  Am.  St.  Rep.  560. 

2  Strain  v.  Wright,  1849,  7  Ga.  568 ;   Price  v.  Furman,  1855,  27  Vt. 
268;  65  Am.  Dec.  194;  Tiffany,  "Persons,"  (2d  ed.)  §  215. 

3  MacGreal  ».  Taylor,  1897,  167  U.  S.  688 ;  17  S.  Ct.  961 ;  Johnson  v. 
Northwestern  Mut.  Life  Ins.  Co.,  1894,  56  Minn.  365 ;   57  N.  W.  934 ; 
59  N.  W.  992 ;   26  L.  R.  A.  187 ;   45  Am.  St.  Rep.  473 ;    Lemmon  v. 
Beeman,  1888,  45  Ohio  St.  505 ;   15  N.  E.  476. 

Ill 


§  70]  MISRELIANCE   ON  NON-EXISTENT  CONTRACT        [Part  I 

and  that  replevin  may  be  maintained  to  recover  it.1  On  the 
other  hand,  if,  at  the  time  of  disaffirmance,  the  infant  has 
wasted  or  disposed  of  the  consideration,  he  is  not  required  to 
make  restitution  in  value,2  the  theory  being  that  to  compel 
restitution  in  such  a  case  would  be  to  deprive  the  infant  of  the 
protection  which  it  is  the  policy  of  the  law  to  afford  him. 

§  70.    Same :    (3)   Lunatics,   drunkards,    and   spendthrifts.  - 
One  who  in  a  proper  proceeding  has  been  judicially  declared 
to  be  a  lunatic,  drunkard,  or  spendthrift,  and  placed  under  a 
guardianship,  is  thereby  deprived  of  his  legal  capacity  to  con- 
tract.3    The  quasi  contractual  obligation  resulting  from  a  con- 

1  Strain  v.  Wright,  1849,  7  Ga.  568 ;    Badger  v.  Phinney,  1819,  15 
Mass.  359 ;  8  Am.  Dec.  105. 

2  Boody  v.  McKenney,  1844,  23  Me.  517,  525 ;   Nielson  v.  Interna- 
tional Text  Book  Co.,  1909,  106  Me.  104;    75  Atl.  330;    Brawner  v. 
Franklin,  1846,  4  Gill  (Md.)  463  ;  Chandler  v.  Simmons,  1867,  97  Mass. 
508;  93  Am.  Dec.  117;  Miller  v.  Smith,  1879,  26  Minn.  248;  2  N.  W. 
942 ;  Lake  v.  Perry,  1909,  95  Miss.  550 ;  49  So.  569,  570-73.     In  some 
cases  it  has  been  held  that  unless  the  infant  can  and  does  restore  the 
consideration  he  has  received,  he  has  no  right,  in  the  absence  of  fraud, 
to  restitution  from  the  other  party :   Holmes  v.  Blogg,  1818,  8  Taunt. 
508 ;  Adams  v.  BeaU,  1887,  67  Md.  53 ;  8  Atl.  664 ;  1  Am.  St.  Rep.  379 ; 
Johnson  v.  Northwestern  Mut.  Life  Ins.  Co.,  1894,  56  Minn.  365 ;   57 
N.  W.  934;   59  N.  W.  992;   26  L.  R.  A.  187;   45  Am.  St.  Rep.  473; 
Heath  v.  Stevens,  1869,  48  N.  H.  251 ;   Holden  Taft  &  Co.  v.  Lineville 
Pike,  1842,  14  Vt.  405 ;   39  Am.  Dec.  228 ;   cf.  Price  v.  Furman,  1855, 
27  Vt.  268 ;   65  Am.  Dec.  194.     But  the  weight  of  authority  is  to  the 
contrary :   Manning  v.  Johnson,  1855,  26  Ala.  446 ;   62  Am.  Dec.  732 ; 
Reynolds  v.  McCurry,  1881,  100  111.  356;    Shirk  v.  Shultz,  1887,  113 
Ind.  571 ;   15  N.  E.  12;   Morse  v.  Ely,  1891,  154  Mass.  458;   28  N.  E. 
577 ;  26  Am.  St.  Rep.  263 ;  Harvey  v.  Briggs,  1890,  68  Miss.  60 ;  8  So. 
274 ;   10  L.  R.  A.  62 ;  Lacy  v.  Pixler,  1894,  120  Mo.  383 ;  25  S.  W.  206 ; 
Englebert  v.  Troxell,  1894,  40  Neb.  195 ;   58  N.  W.  852 ;   26  L.  R.  A. 
177 ;   42  Am.  St.  Rep.  665 ;    Green  v.  Green,  1877,  69  N.  Y.  553 ;   25 
Am.  Rep.  233;   Lemmon  t>.  Beeman,  1888,  45  Ohio  St.  505;   15  N.  E. 
476. 

3  Bradbury  v.  Place,  1887,  (Me.),  10  Atl.  461 ;  Rannells  v.  Gerner, 
1883,  80  Mo.  474,    (insane) ;   Wadsworth  v.  Sharpsteen,  1853,  8  N.  Y 
388;  59  Am.  Dec.  499,  (drunkard).     And  see  Wait  v.  Maxwell,  1827, 
5  Pick.  (Mass.)  217;  16  Am.  Dec.  391,  (insane).     In  some  States  it  is 
held  that  an  adjudication  merely  raises  a  presumption  of  incapacity  to 
contract  which  may  be  rebutted.     See  Mott  v.  Mott,  1891,  49  N.  J.  Eq. 
192 ;   22  Atl.  997,  (insane) ;  In  re  Gangwere's  Estate,  1856,  14  Pa.  St. 
417 ;  53  Am.  Dec.  554,  (insane). 

112 


Chap.  IV]  AUTHORITY   OF   AGENT  WANTED  [§  72 

tract  thereafter  attempted  to  be  entered  into  by  him,  is  there- 
fore governed  by  the  considerations  set  forth  in  this  chapter. 

Without  the  adjudication  above  referred  to,  insanity  or  in- 
toxication, according  to  the  better  view,  does  not  affect  legal 
capacity  to  contract.  If  it  is  such  as  results  in  mental  incapacity 
to  form  a  rational  estimate  of  the  legal  consequences  of  his  act, 
the  insane  or  drunken  person  or  his  representative,  like  the 
infant,  may  be  permitted  to  avoid  the  contract.1  But,  differ- 
ing from  the  case  of  an  infant,  he  is  required,  as  a  rule,  to  place 
the  other  party  in  statu  quo  as  a  condition  precedent  to  avoid- 
ance.2 If  the  other  party  knew  of  the  mental  condition  of  the 
incompetent,  the  latter  may  avoid  the  contract,  though  he  has 
disposed  of  the  consideration : 3  and  in  a  few  jurisdictions  an 
incompetent  who  has  disposed  of  the  consideration  may  avoid 
even  as  against  a  person  who  dealt  with  him  in  ignorance  of  his 
condition.4  In  neither  of  these  cases,  it  seems,  may  restitution 
in  value  be  enforced. 

§71.  Same:  (4)  Corporations. — It  is  one  view  of  ultra 
vires  contracts  that  they  are  void  because  of  a  corporation's 
legal  incapacity  to  make  them,  just  as  a  married  woman's 
contracts  were  void  at  the  common  law.  They  are  more 
properly  regarded,  however,  as  illegal  rather  than  as  void  for 
want  of  capacity,  and  quasi  contractual  obligations  resulting 
from  them  are  considered  in  another  chapter  (post,  §  154  et  seq.). 

§  72.    (F)  Authority  of  agent  wanting.  —  A  contract  entered 

1  See  Tiffany,  "Persons,"  (2d  ed.)  §  230  and  cases  cited ;  Wald's  Pol- 
lock, "Contracts,"  (Williston's  ed.)  p.  93  and  American  cases  collected 
in  note. 

2  Coburn  ».  Raymond,  1904,  76  Conn.  484;   57  Atl.  116;  100  Am. 
St.  Rep.  1000 ;  Scanlan  v.  Cobb,  1877,  85  111.  296 ;  Fay  v.  Burditt,  1882, 
81  Ind.  433 ;    42  Am.  Rep.  142 ;    Gribben  v.  Maxwell,  1885,  34  Kan. 
8 ;  7  Pac.  584 ;  55  Am.  Rep.  233 ;  Young  v.  Stevens,  1868,  48  N.  H.  133 ; 
2  Am.  Rep.  202 ;  97  Am.  Dec.  592 ;   Eaton  ».  Eaton,  1874,  37  N.  J.  L. 
108;   18  Am.  Rep.  716;   Tiffany,  "Persons,"  (2d  ed.)  §  233. 

3  See  cases  cited  in  note  2. 

4  Nichol  ».  Thomas,  1876,  53  Ind.  42 ;    Hovey  0.  Hobson,  1866,  53 
Me.  451 ;  89  Am.  Dec.  705 ;  Gibson  v.  Soper,  1856,  6  Gray  (Mass.)  279 ; 
66  Am.  Dec.  414 ;  Crawford  v.  Scovell,  1880,  94  Pa.  St.  48 ;  39  Am.  Rep. 
766;  Williams  v.  Sapieha,  1901,  94  Tex.  430;   61  S.  W.  115,  118;   Tif- 
fany, "Persons,"  (2d  ed.)  §  233. 

113. 


§  72]  MISRELIANCE   ON  NON-EXISTENT  CONTRACT        [Part  I 

into  with  one  who  is  believed  to  be  the  authorized  agent  of 
another,  but  who  in  reality  has  no  authority  to  act  in  the  prem- 
ises, is  void.  The  promise  which  is  supposed  to  be  made  by 
the  principal  through  the  instrumentality  of  his  agent  is  wanting. 
If  the  agent  has  been  held  out  as  possessing  the  authority  to 
make  the  contract,  the  principal  may  be  liable  under  the 
doctrine  of  estoppel.1  But  if  the  agent  has  neither  actual  nor 
implied  authority,  a  benefit  conferred  upon  the  supposed  prin- 
cipal in  the  course  of  the  performance  is  a  benefit  conferred  in 
reliance  upon  a  right  which  does  not  exist.  It  is  true  that  by 
a  subsequent  ratification  of  the  agent's  promise  the  principal 
may  make  himself  contractually  liable ; 2  and  the  acceptance 
of  the  benefit  of  the  other  party's  performance,  with  full  knowl- 
edge of  the  circumstances,  may  be  regarded  as  an  implied  rati- 
fication.3 But  if  the  benefit  is  received  under  circumstances 
falling  short  of  ratification,  the  principal  should  be  required, 
upon  quasi  contractual  principles,  to  make  restitution. 

A  recovery,  either  at  law  or  in  equity,  has  frequently  been 
allowed : 

Evans  v.  Garlock,  1885,  37  Hun  (N.  Y.  Sup.  Ct.)  588 : 
Action  in  the  nature  of  an  ejectment.  The  defendant  asks  for 
equitable  relief.  Rogers,  the  husband  of  plaintiff's  farm  tenant, 
assuming  to  have  authority  to  act  for  the  plaintiff,  contracted 
to  sell  a  house  and  lot  to  the  defendant,  who  paid  part  of  the 
purchase  money.  With  $450  of  the  money  so  paid  Rogers 
purchased  a  draft  which  he  sent  to  plaintiff  on  account  of 
rent.  BRADLEY,  J.  (p.  591) :  "The  relief  in  view  is  equitable 
in  character  and  the  question  is,  which  of  the  parties  is  in  equity 
and  good  conscience  entitled  to  the  money?  The  defendant 
was  wholly  governed  by  misapprehension  and  mistake  of  the 
fact  in  respect  to  the  authority  of  Rogers,  and  parted  with  the 
money  upon  the  faith  and  belief  that  he  legitimately  represented 
the  plaintiff,  and  was  his  agent  in  the  transaction  duly  authorized 
in  that  behalf.  And  the  plaintiff,  on  the  receipt  of  it,  neither 
relinquished  nor  advanced  anything  which  made  him  the  recip- 

1  Huffcut,  "Agency,"  §  102  and  eases  cited. 

2  Huffcut,  "Agency,"  §  30  and  cases  cited. 
8  Mechem,  "Agency,"  §148. 

114 


Chap.  IV]  AUTHORITY   OF   AGENT  WANTING  [§  72 

lent  for  value  in  a  legal  sense.  It  would  seem  to  follow  that 
upon  well-recognized  equitable  considerations  he  may  be  treated 
as  trustee  of  the  fund  in  behalf  of  the  defendant,  on  his  refusal 
to  ratify  the  purpose  for  which  the  money  was  paid  by  her."  l 

There  are  several  cases,  however,  which  hold  that  the  receipt 
of  a  benefit  by  the  principal  without  a  knowledge  of  all  the 
material  facts  does  not  result  in  obligation.  In  other  words 
proof  of  ratification  is  essential : 

Kelley  v.  Lindsay,  1856,  7  Gray  (Mass.)  287:  DEWEY,  J. 
(p.  290) :  "  If  Coffin  had  no  authority  to  borrow  money  on  the 
account  of  the  defendant,  to  expend  in  his  business  and  to  pay 
his  debts,  the  money  advanced  for  that  purpose,  though  so 
applied,  created  no  debt  against  the  defendant.  No  one  can 
thus  make  himself  a  creditor  of  another  by  the  unsolicited  pay- 
ment of  his  debts :  and  it  is  not  enough  to  create  a  liability  that 
the  defendant  had  the  benefit  of  the  money,  by  reason  of  its 
being  expended  in  his  business  or  in  the  payment  of  his  debts."  2 

Spooner  v.  Thompson,  1876,  48  Vt.  259:  REDFIELD,  J. 
(p.  265) :  "  If  Cutting  borrowed  money  of  the  plaintiff  on  the 
credit  of  Mrs.  Post,  without  her  authority,  and  paid  a  part 
of  it  to  Holmes  &  Ross  without  her  knowledge,  it  could  give  the 
plaintiff  no  right  of  action  against  her.  She  could  not  be  made 
the  debtor  of  the  plaintiff  without  her  consent.  If  Cutting 
borrowed  money  in  her  name,  without  authority,  and  she 
had  knowledge  of  the  fact,  and  that  the  money  went  into 
her  business,  and  she  had  the  benefit  of  it,  she  thereby  adopts 
the  transaction  and  makes  it  her  own."  3 

1  Also :  Reid  v.  Rigby,  [1894]  2  Q.  B.  40,  (cf.  Bannatyne  v.  Maclver, 
[1906]  1  K.  B.  103,  where  it  is  intimated  that  there  could  be  no  recovery  at 
law)  ;  First  Nat.  Bank  v.  Oberne,  1886, 121  111.  25 ;  7.  N.  E.  85 ;  Leonard 
v.  Burlington,  etc.,  Assn.,  1881,  55  la.  594;  8  N.  W.  463;  Billings  v. 
Inhabitants  of  Monmouth,  1881,  72  Me.  174;  First  Baptist  Church  v. 
Caughey,    1877,  85  Pa.  St.   271 ;  Werre  v.   Northwest  Thresher  Co., 
1911,        S.  D.        ;  131  N.W.  721 ;  Farrand,  etc.,  Co.  v.  Board  of  Church 
Extension,  1898,  17  Utah  469 ;  18  Utah  29 ;  54  Pac.  818 ;    Black  Lick 
Lumber  Co.  v.  Camp  Const.  Co.,  1908,  63  W.  Va.  477  ;  60  S.  E.  409,  410. 

2  See,  however,  Newell  v.  Hadley,  1910,  206  Mass.  335,  343,  where  it 
is  suggested  that  equity  might  have  allowed  the  plaintiff  to  stand  in 
the  shoes  of  the  defendant's  creditors. 

3  See  also  Bohart  v.  Oberne,  1887,  36  Kan.  284 ;  13  Pac.  388 ;  Bald- 
win t>.  Burrows,  1872,  47  N.  Y.  199. 

115 


§  73]  MISRELIANCE  ON  NON-EXISTENT  CONTRACT        [Part  I 

Otis  v.  Inhabitants  of  Stockton,  1884,  76  Me.  506 :  PETERS, 
J.  (p.  507) :  "Although  the  question  was  not  so  distinctly 
presented  in  some  of  the  earlier  of  this  class  of  cases,  it  is  now 
well  settled  that  an  action  for  money  had  and  received  will 
not  lie  against  a  town  for  money  loaned  to  its  officers  upon  the 
supposed  credit  of  the  town,  but  without  the  authority  of 
the  town,  although  the  money  be  applied  to  the  payment  of  the 
debts  and  liabilities  of  the  town,  unless  the  town  make  the  act 
valid  by  its  subsequent  sanction  and  consent.  If  there  be  no 
precedent  authority  for  the  action  of  the  town  officers,  it  must 
be  affirmatively  proved  that  the  town  has  subsequently  ap- 
proved and  ratified  their  acts.  Any  other  doctrine  fails  to 
extend  to  municipal  corporations  the  privilege  and  immunities 
that  are  accorded  by  the  law  to  any  and  all  other  classes  of  con- 
tracting parties."  * 

The  reason  given  for  this  conclusion  —  that  to  allow  a  re- 
covery would  be  to  enable  one  to  make  another  his  debtor 
without  his  consent  —  is  met  with  the  obvious  answer  that 
quasi  contractual  obligation  in  general  is  not  dependent  upon 
consent,  and  so  long  as  the  plaintiff's  enrichment  of  the  defendant 
is  the  result  of  honest  mistake  and  not  of  malicious  inter- 
ference with  the  defendant's  affairs,  there  is  no  harm  in  com- 
pelling restitution. 

§  73.  Same :  Instrument  under  seal.  —  The  question  con- 
sidered in  the  preceding  section  has  occasionally  been  pre- 
sented in  cases  of  instruments  under  seal  executed  on  behalf 
of  a  partnership  but  without  the  express  authority  of  all  the 
partners.  At  the  earlier  common  law  the  authority  to  seal 
had  to  be  under  seal,  but  it  is  said  to  be  now  well  established, 
in  most  of  the  United  States,  that  a  partnership  will  be  bound 
by  a  deed  executed  by  one  partner  on  its  behalf,  provided  such 
execution  is  supported  by  either  a  previous  parol  authority  or 
a  subsequent  parol  ratification.2  If  neither  express  authority 
nor  express  ratification  by  all  the  partners  can  be  established, 

1  Three  years  before  the  decision  of  Otis  v.  Inhabitants  of  Stockton, 
the  Supreme  Court  of  Maine,  in  a  case  of  almost  identical  facts,  Billings 
v.  Inhabitants  of  Monmouth,  1881,  72  Me.  174,  allowed  a  recovery. 

2  Parsons,  "Partnership,"  (4th  ed.)  §  122  n. 

116 


Chap.  IV]  AUTHORITY   OF   AGENT  WANTING  [§  73 

the  contract  is  inoperative  as  a  firm  engagement,  but  the  firm 
is  liable  to  the  extent  of  the  benefit  resulting  from  the  other 
party's  performance : 

Van  Deusen  v.  Blum,  1836,  18  Pick.  (Mass.)  229 ;  29  Am. 
Dec.  582 :  Debt  against  a  partnership  upon  a  contract  under 
seal  for  building  a  bridge  by  the  plaintiff,  with  counts  for  labor 
performed  and  materials  furnished.  It  was  held  that,  although 
the  plaintiffs  were  not  entitled  to  judgment  on  the  contract 
because  the  member  of  the  firm  who  executed  it  had  no  authority 
to  bind  the  partnership  by  an  instrument  under  seal,  they  could 
recover  against  the  firm  on  the  counts  for  labor  and  materials. 
MORTON,  J.  (p.  231) :  "The  plaintiffs  undertook  to  execute 
a  contract  between  themselves  and  the  company  [partnership]. 
But  there  being  no  such  contract  in  existence,  they  are  left  to 
resort  to  their  equitable  claim  for  their  labor  and  materials. 
So  far  as  they  benefited  the  company,  the  plaintiffs  are  entitled 
to  recover  against  them."  1 

In  some  cases  the  right  to  recover  has  been  denied : 

Bond  v.  Aitkin,  1843,  6  Watts  &  S.  (Pa.)  165 ;  40  Am.  Dec. 
550 :  Debt  on  a  sealed  note  alleged  to  have  been  executed 
by  John  and  James  Aitkin  as  partners,  with  an  additional 
count  for  money  lent.  The  signature,  "John  and  James  Ait- 
kin," and  the  seal  had  been  attached  by  John,  but  the  firm  had 
received  the  benefit  of  the  proceeds.  SERGEANT,  J.  (p.  168) : 
"  On  the  additional  count,  we  think  the  plaintiff  has  not  shown 
a  right  to  recover.  Where  the  bond  of  one  of  the  partners  is 
taken  for  an  antecedent  partnership  debt,  it  may  be  considered 
either  as  payment  and  extinguishment  of  such  debt,  or  only 
a  collateral  security,  according  to  the  nature  of  the  transaction 
and  the  circumstances  attending  it.  But  where  there  is  no 
antecedent  debt,  but  the  bond  of  one  of  the  partners  is  taken 
at  the  time  money  is  loaned  to  the  partnership,  and  as  the  con- 
sideration for  loaning  the  money,  it  can  hardly  be  treated  as  a 

1  Accord:  Walsh  v.  Lennon,  1880,  98  111.  27;  38  Am.  Rep.  75; 
Daniel  v.  Toney,  1859,  2  Mete.  (59  Ky.)  523  ;  Hermanos  v.  Duvigneaud, 
1855,  10  La.  Ann.  114.  And  see  Moore  v.  Stevens,  1883,  60  Miss, 
809,  816;  Despatch  Line  v.  Bellamy  Co.,  1841,  12  N.  H.  205,  236; 
37  Am.  Dec.  203. 

117 


§  73]  MISRELIANCE   ON  NON-EXISTENT  CONTRACT        [Part  I 

collateral  security.  It  must  be  considered  as  all  one  transaction, 
and  the  bond  as  the  only  security  contemplated ;  unless,  per- 
haps, there  were  strong  and  positive  evidence  to  show  an  ex- 
press agreement  to  the  contrary  by  all  parties.  If  so,  then  in 
this  case  the  bond  was  the  only  debt ;  the  plaintiff,  if  he  recover 
at  all,  must  recover  on  it,  and  not  on  the  money  counts."  1 

These  decisions  appear  to  rest  upon  the  theory  that  since 
the  contract  is  binding  upon  the  partner  who  executes  it,  and 
therefore  the  party  dealing  with  the  unauthorized  agent  actually 
acquires  a  contractual  right  against  some  one,  no  quasi  contractual 
right  can  arise.  The  conclusion,  it  is  believed,  is  erroneous. 
For,  while  it  is  true  that  a  contractual  right  is  acquired,  it  is 
not  the  contractual  right  contemplated  or  relied  upon.  The 
contract  is  entered  into  in  the  belief  that  a  right  is  thereby 
acquired  against  the  partnership,  and  the  benefit  of  performance 
is  conferred  upon  the  partnership  in  reliance  upon  that  belief. 
A  right  against  one  member  of  the  partnership  only  is  an 
entirely  different  thing,  and  may  be  much  less  valuable  if  not 
entirely  worthless.  The  element  of  misreliance  is  just  as  truly 
present  in  such  a  case  as  in  one  in  which  no  contract  right  what- 
ever is  acquired.2 

1  Accord:    Morris  v.  Jones  &  Spence,    1846,    4   Harr.    (Del.)   428; 
Spear  v.  Gillet,  1830, 1  Dev.  Eq.  (16  N.  C.)  466 ;  Waugh  v.  Carriger,  1826; 
1  Yerg.  (9  Tenn.)  31.     And  see  Gait  v.  Calland,  1836,  7  Leigh  (Va.) 
594. 

2  Professor  Keener,  in  criticism  of  Bond  v.  Aitkin,  supra,  says  ("  Quasi- 
Contracts,"  p  327):  "Why  should  the  plaintiff  be  denied  a  right  in 
quasi-contract  because  of  the  right  existing  under  the  law  to  sue  one  of 
a  firm,  not  as  a  member  of  the  firm,  but  as  an  individual,  on  a  contract 
which  was  intended  by  both  parties  to  be  a  firm  contract  only,  binding 
the  firm  as  such,  and  constituting  the  plaintiff  not  an  individual  but  a 
firm  creditor  ?     Clearly,  as  to  the  plaintiff  there  has  been  a  failure  of 
consideration,  in  that  he  has  not  received  that  for  which  he  paid  his 
money.     The  plaintiff  intended  to  receive  from  the  defendants  against 
whom  he  brought  an  action  a  contract  giving  him  a  right  to  call  upon 
them  for  an  equivalent  for  that  which  both  in  fact  received  from  him. 
The  plaintiff  having  delivered  to  the  defendants  what  they  desired,  why 
should  the  defendants,  because  the  plaintiff  received  a  contract  unau- 
thorized in  form,  be  allowed  to  keep  without  compensation  that  for 
which  they  expected  to  pay,  when  they  received  it.     The  plaintiff  did 
not  intend  to  treat  with  the  acting  partner  as  an  individual  simply; 

118 


Chap.  IV]  AUTHORITY   OF   AGENT  WANTING  [§  75 

Where  the  agent  who  executes  the  sealed  instrument  without 
proper  authorization  is  not  one  of  the  principals  as  well,  he  is 
not  personally  bound  unless  the  instrument  contains  apt  words 
for  that  purpose.1  Neither  the '  principal  nor  the  agent  being 
bound,  the  instrument  is  a  nullity,  and  the  doctrine  of  Bond  v. 
Aitkin,  supra,  cannot  be  invoked  to  prevent  a  recovery  in  quasi 
contract.2 

§  74.  Same :  Agent's  abortive  execution  of  sealed  instru- 
ment. —  Closely  resembling  the  case  of  an  instrument  under 
seal  executed  by  an  agent  without  formal  authority  is  that  of 
an  instrument  executed  by  an  agent  in  such  a  manner  as  to 
defeat  its  purpose.  Thus,  the  agent  may  fail  to  indicate  on 
the  face  of  the  instrument  that  he  acts  in  a  representative 
capacity;  or,  while  evincing  representation,  he  may  seal  the 
instrument  with  his  own  seal  instead  of  the  seal  of  his  principal. 
In  neither  case  is  the  principal  bound  by  the  instrument;  in 
both,  if  he  receives  a  benefit  conferred  in  the  belief  that  he  is 
bound,  he  should  pay  a  reasonable  price  therefor.3 

§  75.  Same :  Receipt  of  benefit  by  principal.  —  Whether  or 
not  the  plaintiff's  performance,  especially  if  it  consist  in  the 
payment  of  money,  results  in  a  benefit  to  the  defendant  is 
a  question  likely  to  arise  in  cases  of  contracts  entered  into  with 
unauthorized  agents.  When  money  borrowed  by  an  unau- 

and  when  the  plaintiff  received  a  contract  which  both  parties  supposed 
bound  the  firm,  but  which  in  fact  did  not  bind  the  firm,  the  fact  that  the 
partner  signing  the  firm  name  is  held  in  law  to  have  made  an  individual 
contract,  does  not  change  the  fact  that  the  plaintiff  has  not  received  the 
obligation  for  which  he  contracted,  and  has  not  therefore  received  the 
equivalent  which  he  intended  to  exact  and  thought  he  was  receiving. 
If  the  instrument  delivered  to  the  plaintiff  bound  no  one,  then  without 
question  the  plaintiff  would  be  allowed  to  recover  in  quasi-contract 
against  the  firm.  Why  should  the  fact  that  the  law  gives  to  him  a 
right  which  he  did  not  wish  to  obtain,  and  of  which  he  does  not  desire  to 
avail  himself,  lead  to  a  denial  of  a  similar  right  in  the  case  under 
consideration?" 

1  Stetson  v.  Patten,  1823,  2  Greenl.  (2  Me.)  358;   11  Am.  Dec.  Ill ; 
Abbey  ».  Chase,  1850,  6  Gush.  (Mass.)  54. 

2  See  Delius  v.  Cawthorn,  1829,  2  Dev.  L.  (13  N.  C.)  90,  98. 

3  McCaulley  v.  Jenney,  1875,  5  Houst.  (Del.)  32;  Benham  v.  Emery, 
1887,  46  Hun  (N.  Y.  Sup.  Ct.)  156.     And  see  Osborne  v.  High  Shoals 
Mining,  etc.,  Co.,  1857,  5  Jones'  Law  (50  N.  C.)  177. 

119 


§  75]  MISRELIANCE  ON  NON-EXISTENT  CONTRACT        [Part  I 

thorized  agent  actually  reaches  the  legal  possession  of  the 
principal,  his  receipt  of  a  benefit  is  unquestionable.1  Such 
is  the  case  where  it  is  paid  into  his  bank  account  or  otherwise 
mingled  with  his  funds.2  But  it  has  been  held  that  money 
placed  by  a  city  treasurer  in  a  drawer  provided  by  the  city  for 
his  use  in  keeping  the  funds  of  the  city,  is  not  in  the  legal  pos- 
session of  the  city,  the  treasurer  being  an  independent  account- 
ing officer  and  not  a  mere  agent  or  servant.3 

The  application  of  borrowed  money  to  the  payment  of  the 
principal's  debts  or  business  expenses  constitutes  a  benefit 
to  him  as  clearly  as  a  payment  into  his  hands.4 

It  appears  to  be  thought,  on  the  other  hand,  that  if  money 
so  borrowed  is  neither  turned  over  to  the  principal  nor  expended 
in  his  interest,  the  required  element  of  a  receipt  is  wanting  and 
restitution  must  be  denied : 

Billings  v.  Inhabitants  of  Monmouth,  1881,  72  Me.  174: 
Assumpsit  on  a  note  with  count  for  money  had  and  received. 
The  plaintiff  loaned  money  to  a  town,  through  its  treasurer, 
taking  negotiable  notes  which  the  treasurer  had  no  authority 
to  issue.  BARROWS,  J.  (p.  179) :  "It  is  the  payment  of  the  law- 
ful debts  of  the  town  by  its  own  agents  with  the  plaintiff's 
money  which  constitutes  the  cause  of  action." 

First  Baptist  Church  v.  Caughey,  1877,  85  Pa.  St.  271 : 
Assumpsit  on  a  note  with  indebitatus  counts.  The  plaintiff 
loaned  money  to  a  church,  through  its  trustees,  taking  negotiable 

1  Evans  ».  Garlock,  1885,  37  Hun  (N.  Y.  Sup.  Ct.)  588. 

2  Reid  v.  Rigby,  [1894]  2  Q.  B.  40 ;   Leonard  v.  Burlington  Mutual 
Loan  Assn.,  1881,  55  la.  594 ;  8  N.  W.  463.     But  see  Fay  v.  Slaughter, 
1901,  194  111.  157 ;  62  N.  E.  592 ;  56  L.  R.  A.  564 ;  88  Am.  St.  Rep.  148. 
In  Reid  v.  Rigby,  supra,  it  was  held  the  plaintiff's  right  to  recover 
money  borrowed  without  authority  and   paid  into   the  defendant's 
account  is  not  affected  by  the  fact  that  the  money  was  borrowed  by  the 
agent  to  replace  money  which  he  had  wrongfully  abstracted. 

3  Railroad  Nat.  Bank  v.  City  of  Lowell,  1872,  109  Mass.  214. 

4  Reid  v.  Rigby,  [1894]  2  Q.  B.  40 ;  First  Nat.  Bank  v.  Oberne,  1886, 
121  111.  25;   7  N.  E.  85;   Bicknell  v.  Widner  School  Township,  1881, 
73  Ind.  501 ;  First  Nat.  Bank  v.  Union  School  Township,  1881,  75  Ind. 
361 ;    Leonard  v.  Burlington  Mutual  Loan  Assn.,  1881,  55  la.  594 ; 
8  N.  W.  463;  Billings  v.  Inhabitants  of  Monmouth,  1881,  72  Me.  174; 
First  Baptist  Church  v.  Caughey,  1877,  85  Pa.  St.  271. 

120 


Chap.  IV]  AUTHORITY   OF   AGENT  WANTING  [§  75 

paper  which  the  trustees  were  not  empowered  to  issue.  GAL- 
BRAITH,  P.J.  (of  the  trial  court,  the  judgment  being  affirmed 
above),  (p.  272) :  "If  the  jury  believe  from  the  evidence  that 
the  money  for  which  the  note  was  executed  by  the  trustees  was 
used  by  them,  or  by  other  officers  of  the  church,  in  rebuilding 
the  church  building,  and  so  went  to  the  benefit  of  the  society, 
then  the  law  raises  an  implied  obligation  in  equity  and  good 
conscience,  as  well  as  in  law,  on  the  part  of  the  church  to  repay 
it,  and  the  verdict  should  be  for  the  plaintiff.  If,  on  the  con- 
trary, the  jury  believe  from  the  evidence  that  the  money  went  to 
pay  a  debt  of  W.  J.  F.  Liddell,  one  of  the  trustees  who  signed  the 
note,  .  .  .  plaintiff  could  not  recover." 

In  case  the  agent  receiving  the  money  has  no  authority  to 
borrow,  the  conclusion  that  a  payment  over  to  the  principal 
or  an  application  in  his  interest  must  be  shown  in  order  to 
establish  the  receipt  of  a  benefit  by  such  principal,  is  undoubtedly 
sound.1  But  if  an  agent  is  authorized  to  borrow  money  for 
his  principal  and  the  promise  to  repay  is  void  merely  because 
it  is  in  a  form  in  which  he  is  not  authorized  to  make  it  — 
as,  where  the  agent  has  no  authority  to  issue  negotiable 
paper  —  it  would  seem  that  the  receipt  of  the  money  by  the 
agent  is  the  equivalent  of,  or  in  contemplation  of  law  amounts 
to,  a  receipt  by  the  principal,  that  a  benefit  to  the  principal 
thereupon  accrues,  and  that  the  subsequent  disposition  of  the 
money  by  the  agent  is  immaterial.2 

1  Thompson  v.  Murphy,  1906,  60  W.  Va.  42 ;  53  S.  E.  908 ;  6  L.  R.  A. 
(N.  S.)  311.     The  same  is  true  of  money  paid  on  a  contract,  which  the 
agent  is  not  authorized  to  receive.     See  McKiernan  v.  Valleau,  1902, 
23  R.  I.  501 ;  51  Atl.  102. 

2  Keener,  "Quasi-Contracts,"  p.  332  (commenting  on  First  Baptist 
Church  v.  Caughey) :   "Since  there  was  no  excess  of  authority  on  the 
part  of  the  trustees  in  borrowing  money,  there  seems  to  be  no  reason 
why  the  loss  in  the  event  of  a  misappropriation  should  be  thrown  upon 
the  plaintiff,  simply  because  the  trustees,  when  they  borrowed  the 
money,  attempted  to  give  the  plaintiff  a  form  of  obligation  which  they 
had  not  the  power  to  issue.     Had  the  trustees,  in  the  exercise  of  their 
authority,  simply  borrowed  the  money,  and  orally  bound  the  corpora- 
tion to  pay  the  same,  it  would  not  be  contended  that  the  plaintiff 
should  look  to  the  application  of  the  money ;   why  then  should  he  be 
required  to  look  to  its  application  simply  because  he  has  failed  to  re- 
ceive the  obligation  which  he  expected?'' 

121 


§  76]  MISRELIANCE   ON  NON-EXISTENT  CONTRACT        [Part  I 

§  76.  Same  :  Misuse  of  money  by  agent.  —  Professor  Keener 
contends  that  where  money  is  borrowed  by  an  agent  having 
no  authority  to  borrow,  and  is  made  a  part  of  the  funds  of  the 
principal,  and  then  misused  by  the  agent,  the  lender  is  not 
entitled  to  restitution : 

Keener  on  "Quasi-Contracts,"  p.  334,  in  discussing  Billings 
v.  Monmouth:1  "For  while  the  town  [defendant],  because 
of  receiving  the  plaintiff's  money,  should  be  put  under  an  obliga- 
tion to  make  restitution,  that  obligation  resting  on  the  fact  of 
an  unjust  enrichment  on  the  part  of  the  town,  a  loss  arising  from 
the  misuse  of  the  money  without  any  fault  on  the  part  of  the 
town,  should,  it  is  submitted,  fall  on  the  plaintiff.  ...  It 
would  be  unjust,  therefore,  to  hold  the  town  responsible  for 
money  put  into  its  treasury  without  its  authority  and  without 
its  knowledge,  and  from  which  it  had  derived  no  benefit." 

The  learned  author  has  the  support  of  the  Supreme  Court  of 
Illinois : 

Fay  v.  Slaughter,  1902, 194  111.  157 ;  62  N.  E.  592 ;  56  L.  R.  A. 
564;  88  Am.  St.  Rep.  148:  Action  for  money  had  and  re- 
ceived. The  defendant's  agent,  who  had  a  power  of  attorney 
to  draw  checks  on  the  Northern  Trust  Co.  and  to  indorse  checks 
for  deposit  with  said  company,  forged  the  defendant's  name  upon 
an  assignment  of  stock  certificates  belonging  to  defendant 
and  transferred  them  to  plaintiffs  who  were  innocent  purchasers. 
In  payment  the  agent  received  checks  to  the  defendant's  order, 
which  he  indorsed  with  defendant's  name  and  deposited  with 
the  Northern  Trust  Co.,  where  they  were  credited  to  defendant's 
account.  The  agent  subsequently  drew  checks  upon  the 
defendant's  account  in  the  Trust  Company,  and  appropriated 
the  proceeds.  RICKS,  J.  (p.  170) :  "We  are  unable  to  concur 
in  the  view  that  the  mere  passing  of  this  money  through  the 
bank  account  of  plaintiff  in  error  without  authority  given  by  him, 
and  in  the  absence  of  evidence  showing  it  went  to  his  benefit 
or  was  used  by  or  for  him,  can  be  held  to  be  such  receiving  of 
the  money  of  the  defendants  in  error  by  him  as  in  equity  and 
good  conscience  renders  him  liable  for  money  had  and  received 

i  1881,  72  Me.  174. 
122 


Chap.  IV]  AUTHORITY   OF   AGENT  WANTING  [§  77 

for  the  use  of  the  defendants  in  error.  In  this  record  there  is 
no  evidence  showing  or  tending  to  show,  that  plaintiff  in  error 
got  the  real  benefit  of  any  of  this  money,  either  by  checking 
it  out  for  his  own  use  or  by  its  being  checked  and  applied  to  his 
business." 

This  view,  it  is  submitted,  is  not  tenable.  It  is  the  receipt 
of  a  benefit  and  not  the  use  or  enjoyment  of  it  which  is  essential 
to  quasi  contractual  obligation.  The  loss  of  money,  after  it 
has  become  a  part  of  the  funds  of  the  principal,  through  fire 
or  robbery,  would  deprive  the  clefendant  of  its  use  and  enjoy- 
ment, but  would  hardly  enable  him  to  deny  that  a  benefit  had 
been  received  by  him.1  That  it  is  lost  through  the  misconduct 
of  the  same  agent  who  added  it  to  his  funds  is  immaterial. 

§  77.  Same  :  Receipt  of  benefit  by  agent :  Smout  v.  Ilbery.  — 
It  is  the  general  rule  that  one  who  purports  to  contract  as  the 
agent  of  another  impliedly  warrants  his  authority,  and  there- 
fore may  be  held  for  breach  of  warranty  if  the  assumed  au- 
thority is  wanting.2  Where,  however,  the  agent  in  good  faith 
discloses  all  of  the  facts  touching  the  question  of  his  authority 
in  order  that  the  person  with  whom  he  deals  may  judge  for 
himself  as  to  the  existence  or  extent  of  such  authority,  no 
warranty  is  implied.3  If,  in  such  a  case,  the  agent  receives 
a  benefit  from  the  performance  of  the  other  party  and  instead 
of  turning  it  over  to  his  principal  retains  it  himself,  is  he  re- 
sponsible, quasi  contractually,  for  its  value?  The  answer 
must  be  in  the  negative,  for  the  very  circumstances  that  dis- 
prove the  existence  of  an  implied  warranty  show  that  the  per- 
son with  whom  the  agent  dealt  assumed  the  risk  that  he  was 
without  authority  and  therefore  cannot  be  said  to  have  con- 
ferred the  benefit  in  misreliance  upon  a  supposed  right  that 
turned  out  to  be  non-existent  (ante,  §  16). 

1  See  ante,  §  30  as  to  effect  of  loss  or  theft  of  identical  thing  received 
by  defendant. 

2Mechem,  "Agency,"  §§  544,  545;  Huffcut,  "Agency,"  §  183  and 
cases  cited. 

•Mechem,  ."Agency,"  §  546;  Huffcut,  "Agency,''  §  183  and  cases 
cited. 

123 


§  78]  MISRELIANCE   ON  NON-EXISTENT  CONTRACT        [Part  I 

In  the  English  case  of  Smout  v.  Ilbery,1  decided  in  1842,  it 
was  held  that  the  defendant,  whose  husband  had  left  England 
for  China,  was  not  liable  to  the  plaintiff,  a  butcher,*-for  meat 
purchased  by  her  as  the  agent  of  her  husband  after  the  death 
of  the  husband  but  before  information  of  his  death  was  received. 
This  decision  has  been  criticised,2  but  reasonably  interpreted 
it  commands  respect.  In  the  first  place  it  should  be  remembered 
that  in  1842  the  doctrine  of  the  agent's  liability  for  breach  of 
warranty,  as  distinguished  from  his  liability  in  deceit,  had  not 
been  fully  developed.3  And  in  the  second  place  it  is  a  reason- 
able inference  that  there  was  in  fact  no  implied  representation 
of  authority.  As  was  said  in  a  recent  judicial  discussion  of 
the  case :  4  "  The  husband  had  left  England  for  China  in  May, 
1839,  a  time  in  the  history  of  the  world  when  communication 
was  not  what  it  is  now,  and  the  Court  seems  to  have  decided 
upon  the  ground  that  the  butcher  who  supplied  the  goods  knew 
that  the  facts  were  such  that  the  wife  did  not,  because  she  could 
not,  take  upon  herself  to  affirm  that  he  was  alive.  If  so,  there 
was  no  implied  contract."  But  whether  or  not  this  was  the 
true  ratio  decidendi,  it  seems  clear  that  if  the  case  were  to  arise 
to-day,  it  would  be  held,  either  (1)  that  upon  a  proper  inter- 
pretation of  the  facts  there  was  an  implied  warranty  of  au- 
thority, or  (2)  that  credit  was  given  to  the  wife  as  principal, 
or  (3)  that  there  being  no  warranty  of  authority  and  credit 
not  having  been  given  to  the  wife  as  principal,  the  plaintiff 
"  took  a  chance  "  that  he  was  acquiring  no  contract  right  to 
compensation  for  the  goods  furnished,  and  therefore  is  not 
entitled,  upon  the  theory  of  misreliance,  to  restitution. 

§  78.  Same :  Restitution  against  public  policy :  Benefit  con- 
ferred upon  municipal  corporations.  —  Special  considerations 
of  public  policy  have  led  the  courts  to  refuse  to  allow  a  recovery 
in  quasi  contract  in  many  instances  of  benefits  conferred  upon 
municipal  corporations  under  void  or  illegal  contracts.  The 

1  10  Mees.  &  Wels.  1. 

2  See  Keener,  "  Quasi-Contracts,"  pp.  334-6. 

3  See  Collen  v.  Wright,  1857,  8  El.  &  Bl.  647. 
*  Younge  v.  Toynbee,  [1910]  1  K.  B.  215,  228. 

124 


Chap.  IV]  AUTHORITY   OF   AGENT   WANTING  [§  79 

various  cases,  including  those  of  benefits  conferred  under  con- 
tracts void  for  want  of  authority  in  the  agent  professing  to  act 
for  the  municipality,  are  discussed  in  the  chapter  on  ultra  vires 
contracts  of  corporations  (post,  §  161). 

§  79.  Same :  Form  of  action  against  principal.  —  Where 
money  paid  to  an  unauthorized  agent  is  turned  over  to  the  prin- 
cipal or  mingled  with  his  funds,  it  is  clear  that  an  action  for 
money  had  and  received  will  lie  against  the  principal.1  Where 
the  agent  receiving  the  money  is  authorized  to  borrow,  and  the 
invalidity  of  the  contract  results  merely  from  its  unauthorized 
form,  the  receipt  by  the  agent  amounts  in  legal  contemplation 
to  a  receipt  by  the  principal  (ante,  §  75),  and  consequently 
should  support  an  action  for  money  had  and  received  against 
the  principal,  whatever  disposition  of  the  money  is  subsequently 
made  by  the  agent.  Where  the  agent  receiving  the  money  is 
not  authorized  to  borrow,  and  instead  of  paying  it  over  to  the 
principal  or  mingling  it  with  his  funds,  applies  it  to  the  satis- 
faction of  debts  of  the  principal,  the  count  for  money  had  and 
received  is  unavailable  against  the  principal.  It  would  seem, 
however,  that  an  action  for  money  paid  to  the  defendant's  use 
should  be  sustained.2  Moreover,  the  circumstances  would 
seem  to  justify  the  subrogation  of  the  plaintiff  to  the  rights  of 
the  creditors  of  the  principal  upon  whose  claims  the  money 
was  applied.3 

1  Reid  v.  Rigby,  [1894]  2  Q.  B.  40 ;   Leonard  v.  Burlington  Mutual 
Loan  Assn.,  1881,  55  la.  594;  8  N.  W.  463. 

2  See  Reid  v.  Rigby,  [1894]  2  Q.  B.  40,  opinion  of  COLLINS,  J. ;  Bick- 
nell  v.  Widner  School  Township,  1881,  73  Ind.  501,  505. 

3  White  River  School  Township  v.    Dorrell,  1901,  26  Ind.  App.  538; 
59  N.  E.  867. 


125 


wn- 


CHAPTER  V 

MISRELIANCE    ON    NON-EXISTENT    OR    INVALID    CONTRACT    (con- 
tinued) :    ALTERED   OR   FORGED   NEGOTIABLE   INSTRUMENTS 

§  80.     (I)  Mistake  by  drawee  as  to  genuineness  of  body  of  instrument 

or  of  signature  of  drawer  or  indorser. 
§  81.        Same :  Why  is  restitution  denied  where  drawer's  signature  is 

forged  ? 

§  82.         (1)  The  conclusive  presumption  theory. 
§  83.         (2)  The  negligence  theory. 
§  84.         (3)  The  equal  equities  theory. 
§  85.         (4)  The  change  of  position  theory. 
§  86.         (5)  The  theory  that  there  is  no  mistake  as  to  drawer's  duty 

to  holder. 

§  87.         (6)  The  theory  that  the  rule  is  one  of  policy. 
§  88.         (7)  The  rule  criticized. 
§  89.     (II)  Mistake  by  payor  for  honor  as  to  genuineness  of  drawer's 

signature. 

§  90.     (Ill)  Mistake  as  to  genuineness  of  payer's  signature. 
§  91.     (IV)  Mistake  as  to  genuineness  of  bill  of  lading  attached  to  draft. 
§  92.     (V)  Effect  of  negligence. 

§  80.  (I)  Mistake  by  drawee  as  to  genuineness  of  body  of 
instrument  or  of  signature  of  drawer  or  indorser.  —  It  appears 
to  be  well  settled  that  money  paid  by  the  drawee  of  a  negotiable 
instrument  to  the  holder,  under  a  mistake  as  to  the  genuine- 
ness of  the  body  of  the  instrument,1  or  of  the  .signature  of  an  in- 

1  Espy  v.  Bank  of  Cincinnati,  1873,  18  Wall.  (U.  S.)  604;  Reding- 
ton  v.  Woods,  1873,  45  Cal.  406 ;  13  Am.  Rep.  190 ;  Parke  v.  Roser, 
1879,  67  Ind.  500 ;  33  Am.  Rep.  102 ;  Third  Nat.  Bank  v.  AUen,  1875, 
59  Mo.  310 ;  Bank  of  Commerce  v.  Union  Bank,  1850,  3  N.  Y.  230 ; 
Nat.  Bank  of  Commerce  v.  Nat.  M.  B.  Assn.,  1873,  55  N.  Y.  211 ;  14 
Am.  Rep.  232 ;  Marine  Nat.  Bank  v.  Nat.  City  Bank,  1874,  59  N.  Y.  67  ; 
17  Am.  Rep.  305  ;  White  v.  Continental  Nat.  Bank,  1876,  64  N.  Y.  316 ; 
21  Am.  Rep.  612 ;  Security  Bank  v.  Nat.  Bank  of  Republic,  1876,  67 
N.  Y.  458 ;  23  Am.  Rep.  129 ;  Clews  ».  N.  Y.  Nat.  Banking  Assn.,  1882, 
89  N.  Y.  418 ;  42  Am.  Rep.  303 ;  City  Bank  v.  First  Nat.  Bank,  1876, 
45  Tex.  203.  And  see  Imperial  Bank  v.  Bank  of  Hamilton,  [  1903) 

126 


Chap.  V]  MISTAKE   BY  DRAWEE  [§  80 

dorser,1  is  recoverable.  On  the  other  hand,  it  is  held  in  most 
jurisdictions  that  the  drawee  cannot  recover  money  paid  under 
a  mistake  as  to  the  genuineness  of  the  drawer's  signature.2 

A.  C.  49.  But  see  Crocker- Woolworth.  Nat.  Bank  v.  Nevada  Bank, 
1903,  139  Cal.  564 ;  73  Pae.  456 ;  63  L.  R.  A.  245 ;  96  Am.  St.  Rep. 
169.  Professor  Ames  called  attention  to  the  fact  that  in  continental 
Europe  the  holder  need  not  refund.  See  4  Harv.  Law  Rev.  297,  306, 
citing  1  Nouguier,  "Lettre  de  Change"  (4th  ed.),  §  325;  2  Pardessus, 
i"Cours  de  Droit  Commercial"  (3d  ed.),  §506;  Wachter,  "Wechsel- 
recht,"  481. 

1  Espy  v.  Bank  of  Cincinnati,  1873,  18  Wall.  (U.  S.)  604;    United 
States  v.  Nat.  Exch.  Bank,  1909,  214  U.  S.  302 ;  29  S.  Ct.  665,  (pension 
check) ;    La  Fayette  &  Bro.  v.  Merchants'  Bank,  1905,  73  Ark.  561 ; 
84  S.  W.  700 ;  68  L.  R.  A.  231 ;   108  Am.  St.  Rep.  71 ;  Mills  v.  Barney, 
1863,  22  Cal.  240,  (certificate  of  deposit) ;  Bartlett  v.  First  Nat.  Bank, 
1910,  247  111.  490;    93  N.   E.  337;   Cochran   v.   Atchison,  1882,  27 
Kan.  728;    Wellington  Nat.  Bank  v.  Robbins,  1905,  71    Kan.  748; 
81  Pac.  487;    114  Am.  St.  Rep.  523;    McCall  ».  Corning,  1848,  3  La. 
Ann.  409 ;   48  Am.  Dec.  454 ;    Carpenter  v.  Northborough  Nat.  Bank, 
1877,  123  Mass.  66 ;    First  Nat.  Bank  v.  City  Nat.  Bank,  1902,  182 
Mass.  130;   65  N.  E.  24;   94  Am.  St.  Rep.  637;    Third  Nat.  Bank  v. 
Allen,  1875,  59  Mo.  310 ;   First  Nat.  Bank  v.  Farmers'  &  Merchants' 
Bank,  1898,  56  Neb.  149 ;   76  N.  W.  430 ;   Star  Fire  Ins.  Co.  v.  N.  H. 
Nat.  Bank,  1881,  60  N.  H.  442;   Canal  Bank  v.  Bank  of  Albany,  1841, 
1  Hill  (N.  Y.)  287 ;    Holt  v.  Ross,  1873,  54  N.  Y.  472 ;    13  Am.  Rep. 
615 ;    Corn  Exch.  Bank  v.  Nassau  Bank,  1883,  91  N.  Y.  74 ;   43  Am. 
Rep.  655 ;   Ryan  v.  Bank  of  Montreal,  1886,  12  Ont.  39 ;   Chambers  v. 
Union  Nat.  Bank,  1875,  78  Pa.  St.  205.     But  see  London,  etc.,  Bank  v. 
Bank  of  Liverpool,  [1896]  1  Q.  B.  7. 

2  Price  v.  Neal,  1762,  3  Burr.  1354 ;  Smith  v.  Mercer,  1815,  6  Taunt. 
76 ;   Redington  v.  Woods,  1873,  45  Cal.  406 ;   13  Am.  Rep.  190 ;   First 
Nat.  Bank  v.  Ricker,  1874,  71  111.  439 ;   22  Am.  Rep.  104 ;   First  Nat. 
Bank  v.  MarshaUtown  State  Bank,  1899,  107  la.  327 ;   77  N.  W.  1045 ; 
44  L.  R.  A.  131 ;   Howard  v.  Mississippi  Bank,  1876,  28  La.  Ann.  727; 
26,  Am.  Rep.  105,  (virtually  overruling  McKleroy  v.  Southern  Bank, 
1859,  14  La.  Ann.  458 ;  74  Am.  Dec.  438) ;  Commercial,  etc.,  Bank  v. 
First  Nat.  Bank,  1868,  30  Md.  11 ;  96  Am.  Dec.  554 ;  Gloucester  Bank 
v.  Salem  Bank,  1820,  17  Mass.  33;    Nat.  Bank  v.  Bangs,  1871,  106 
Mass.  441 ;   8  Am.  Rep.  349 ;   Bernheimer  v.  Marshall,  1858,  2  Minn. 
78 ;    72  Am.  Dec.  79 ;    Pennington  County  Bank  v.  First  State  Bank, 
1910,  110  Minn.  263  ;  125  N.  W.  119 ;  136  Am.  St.  Rep.  496 ;  26  L.  R. 
A.  (N.  S.)  849 ;   Stout  v.  Benoist,  1866,  39  Mo.  227 ;  90  Am.  Dec.  466 ; 
Weisser  v.  Denison,  1854,  10  N.  Y.  68 ;   61  Am.  Dec.  731 ;  Nat.  Park 
Bank  v.  Ninth  Nat.  Bank,  1871,  46  N.  Y.  77;  7  Am.  Rep.  310;  Frank 
v.  Chemical  Nat.  Bank,  1881,  84  N.  Y.  209;   38  Am.  Rep.  501 ;  Nat. 
Bank  of  Comm.  v.  Grocers'  Nat.  Bank,   1867,  2  Daly  (N.  Y.  C.  P.) 
289;    Ryan  v.  Bank  of  Montreal,  1886,  12  Ont.    39;  Farmers',  etc., 

127 


§  81]  FORGED   NEGOTIABLE   INSTRUMENTS  [Part  I 

The  right  to  recover  in  the  former  cases  is  sometimes  declared 
to  arise  from  the  implied  warranty  by  the  holder  that  the  paper 
is  genuine.  Assuming  that  there  is  such  an  implied  warranty 
by  the  indorser  in  the  case  of  a  sale  of  the  paper,1  presentation 
and  payment  can  hardly  be  regarded  as  a  sale.2  It  seems  more 
accurate  to  say  that  the  right  to  recover  is  a  quasi  contractual 
right,  resting  upon  the  doctrine  that  one  who  confers  a  benefit 
in  misreliance  upon  a  right  or  duty  is  entitled  to  restitution.3 

§  81.  Same:  Why  is  restitution  denied  where  drawer's  signa- 
ture is  forged  ?  —  Several  attempts  have  been  made  to  explain 
away  the  apparent  inconsistency  of  allowing  a  recovery  where  an 
indorsement  is  forged  or  the  body  of  the  instrument  altered,  and 
denying  a  recovery  where  the  signature  of  the  drawer  is  forged. 

Bank  v.  Bank  of  Rutherford,  1905,  115  Tenn.  64;  88  S.  W.  939;  112 
Am.  St.  Rep.  817 ;  Bank  of  St.  Albans  v.  Farmers'  Bank,  1838,  10  Vt. 
141 ;  33  Am.  Dec.  188 ;  Johnston  v.  Commercial  Bank,  1885,  27  W.  Va. 
343 ;  55  Am.  Rep.  315.  See  also  Hoffman  v.  Milwaukee  Bank,  1870, 
12  Wall.  (U.  S.)  181 ;  Young  v.  Lehman,  1879,  63  Ala.  519 ;  Hardy 
».  Chesapeake  Bank,  1879,  51  Md.  562 ;  34  Am.  Rep.  325 ;  First  Nat. 
Bank  of  Danvers  v.  First  Nat.  Bank  of  Salem,  1890,  151  Mass.  280 ; 
24  N.  E.  44 ;  21  Am.  St.  Rep.  450 ;  Star  Fire  Ins.  C.  v.  N.  H.  Nat. 
Bank,  1881,  60  N.  H.  442.  Contra:  First  Nat.  Bank  v.  Bank  of 
Wyndmere,  1906,  15  N.  D.  299 ;  108  N.  W.  546 ;  10  L.  R.  A.  (N.  S.) 
49;  American  Express  Co.  v.  State  Nat.  Bank,  1911,  27  Okl.  824;  113 
Pac.  711  ;  33  L.  R.  A.  (N.  S.)  188.  . 

The  same  rule  prevails  in  continental  Europe.  See  Ames,  "The 
Doctrine  of  Price  v.  Neal,"  4  Harv.  Law  Rev.  297,  298,  citing :  2 
Pardessus,  ."Coursde  Droit  Commercial"  (3d  ed.),  §  501;  Wachter, 
"Wechselrecht,"  482. 

'See  Uniform  Negotiable  Instrument  Law,  §  116;  Norton  on 
f  Bills  &  Notes"  (3d  ed.),  p.  162. 

2  Professor  Ames,  in  4  Harv.  Law  Rev.  297,  302,  says :  "The  notion 
that  the  holder's  indorsement  of  his  name  on  the  bill  at  the  time  of 
payment  is  a  warranty  of  the  genuineness  of  the  bill,  although  not 
without  judicial  sanction  [Nat.  Bank  v.  Banks,  1871,  106  Mass.  441 ; 
8  Am.  Rep.  349;  People's  Bank  v.  Franklin  Bank,  1889,  88  Tenn. 
299;  12  S.  W.  716;  6  L.  R.  A.  724;  17  Am.  St.  Rep.  884],  should  be 
strenuously  resisted.  The  so-called  indorsement  is  not  an  indorse- 
ment at  all,  but  simply  a  receipt  of  payment."  Citing:  Wilkinson  v. 
Johnson,  1824,  3  Barn.  &  C.  428,  436;  Bernheimer  v.  Marshall, 
1858,  2  Minn.  78,  84 ;  72  Am.  Dec.  79 ;  Bank  of  St.  Albans  v.  Farmers' 
Bank,  1838,  10  Vt.  141,  146-7,  33  Am.  Dec.  188. 

1  First  Nat.  Bank  v.  City  Nat.  Bank,  1902,  182  Mass.  130 ;  65  N.  E. 
24 ;  94  Am.  St.  Rep.  637. 

128 


Chap.  V]  THE   NEGLIGENCE   THEORY  •  [§  83 

The  rule  permitting  a  recovery  in  the  former  cases  is  generally 
conceded  to  be  sound.  The  leading  decision  denying  the  right 
in  the  latter  case  is  Price  v.  Neal,1  decided  by  Lord  MANSFIELD 
in  1762.  In  that  case  a  drawee-acceptor  who  paid  two  bills 
purporting  to  be  drawn  upon  him  by  drawers  whose  signatures 
were  in  fact  forged  was  denied  a  recovery  from  an  innocent 
indorsee,  to  whom  he  had  at  maturity  paid  the  bills.  There 
were  no  special  circumstances  of  negligence  on  plaintiff's  part 
save  such  as  may  be  necessarily  implied  from  his  failure  to  rec- 
ognize the  forgery,  nor  any  special  estoppel  against  him  and  in 
favor  of  the  defendant  other  than  such  as  may  be  inferred  from 
the  foregoing  facts. 

In  an  effort  to  support  the  denial  of  relief  in  this  and  similar 
cases,  several  theories  have  been  advanced.  They  will  be  con- 
sidered in  the  following  sections. 

§  82.  (1)  The  conclusive  presumption  theory.  —  It  is  com- 
monly said  that  the  drawee  is  conclusively  presumed  to  know 
the  signature  of  the  drawer,  and  therefore  pays  at  his  peril. 

This  theory,  if  it  may  be  so  called,  is  strongly  suggested  by 
Lord  MANSFIELD  in  the  leading  case  of  Price  v.  Neal.2  "  It  was 
incumbent  upon  the  plaintiff,"  he  says,  "  to  be  satisfied  '  that 
the  bill  drawn  upon  him  was  the  drawer's  hand,'  before  he  ac- 
cepted or  paid  it;  but  it  was  not  incumbent  on  the  defendant 
to  inquire  into  it."  It  is  certainly  the  favorite  explanation  of 
the  rule  and  is  reiterated  in  nearly  every  judicial  opinion  bearing 
upon  the  question.  But  it  is  in  reality  only  another  way  of 
stating  the  rule,  rather  than  an  explanation  of  it.  For  the  ques- 
tion remains :  Why  is  he  conclusively  presumed  to  know  the 
signature  of  the  drawer  ?  "  Why  is  the  drawee's  excusable 
ignorance  an  irrevelant  fact  ?  " 3 

§  83.  (2)  The  negligence  theory.  —  Another  explanation  that 
has  been  offered  is  that  in  accepting  or  paying  a  bill  the  signa- 
ture of  the  drawer  of  which  is  forged,  the  drawee  is  chargeable 
with  negligence. 

1  3  Burr.  1354. 

2  1762,  3  Burr.  1354,  1357. 

8  Ames,  !'The  Doctrine  of  Price  v.  Neal,"  4  Harv.  Law  Rev.  297,  299. 

129 


§  83]  FORGED   NEGOTIABLE   INSTRUMENTS  [Part  I 

This  is  the  theory  upon  which  the  defense  in  the  leading  case 
of  Price  v.  Neal  was  rested.  Mr.  Yates,  for  the  defendant, 
"  denied  it  to  be  a  payment  by  mistake :  and  insisted  that  it 
was  rather  owing  to  the  negligence  of  the  plaintiff ;  who  should 
have  inquired  and  satisfied  himself,  '  whether  the  bill  was  really 
drawn  upon  him  by  Sutton,  or  not.' '  And  Lord  MANSFIELD, 
in  the  course  of  his  opinion,  said : l  "  Whatever  neglect  there 
was,  was  on  his  [plaintiff's]  side.  The  defendant  had  actual 
encouragement  from  the  plaintiff  himself,  for  negotiating  the 
second  bill,  from  the  plaintiff's  having  without  any  scruple  or 
hesitation  paid  the  first ;  and  he  paid  the  whole  value  bona  fide. 
...  in  this  case,  if  there  was  any  fault  or  negligence  in  any 
one,  it  certainly  was  in  the  plaintiff,  and  not  in  the  defendant." 

The  notion  that  negligence  on  the  part  of  the  drawee  is  the 
basis  of  liability  is  suggested,  if  not  relied  upon,  in  a  number  of 
cases.  The  following  statement  is  typical : 

Ellis  v.  Ohio  Life  Ins.  &  Trust  Co.,  1855,  4  Ohio  St.  628 ; 
64  Am.  Dec.  610:  RANNEY,  J.  (p.  652) :  "We  admit  it  to  be 
equally  well  settled,  that,  where  the  instrument  is  drawn  upon, 
or  purports  to  be  signed  by,  the  party  paying  the  money, 
to  a  holder  without  fault,  and  whose  situation  would  be  thereby 
changed,  to  his  prejudice  if  he  were  compelled  to  refund,  the 
money  cannot  be  recovered  back.  The  foundations  of  the  rule 
are  sufficiently  obvious.  The  party  is  supposed  to  know  his 
own  handwriting,  in  the  one  case,  or  that  of  his  customer  or 
correspondent  in  the  other,  much  better  than  the  holder  can ; 
and  the  law,  therefore,  allows  the  holder  to  cast  upon  him  the 
entire  responsibility  of  determining  as  to  the  genuineness  of 
the  instrument,  and  if  he  fails  to  discover  the  forgery,  imputes 
to  him  negligence,  and,  as  between  him  and  the  innocent  holder, 
compels  him  to  suffer  the  loss."  2 

1  Price  v.  Neal,  1762,  3  Burr.  1354,  1357. 

2  See  also  First  Nat.  Bank  v.  Ricker,  1874,  71   111.  439 ;   22  Am. 
Rep.  104 ;   Gloucester  Bank  v.  Salem  Bank,  1820,  17  Mass.  33 ;   Bern- 
heimer  v.  Marshall,  1858,  2  Minn.  78 ;  72  Am.  Dec.  79 ;  Stout  v.  Benoist, 
1866,  39  Mo.  277;   90  Am.  Dec.  466 ;  Farmers',  etc.,  Bank  v.  Bank  of 
Rutherford,  1905,  115  Tenn.  64;    88  S.  W.  939;    112  Am.  St.  Rep. 
817 ;  Bank  of  Williamson  v.  McDowell  County  Bank,  1910,  66  W.  Va. 
545;  66  S.  E.  761. 

130 


Chap.  V]  THE   NEGLIGENCE   THEORY  [§  83 

There  are,  as  Professor  Ames  has  pointed  out,  two  objections 
to  this  theory.  In  the  first  place,  its  proper  application  would 
require  that  the  plaintiff  be  permitted  to  show,  by  evidence  of 
the  skillfulness  of  the  forgery  or  other  exculpatory  circumstances, 
that  as  a  matter  of  fact  he  was  not  negligent.  It  seems  likely, 
however,  that  such  evidence  would  ordinarily  .be  excluded.  In 
the  case  of  Hardy  v.  Chesapeake  Bank,1  for  instance,  the  court 
said :  "If  the  bank  pays  money  on  a  forged  check,  no  matter 
under  what  circumstances  of  caution,  or  however  honest  the 
belief  in  its  genuineness,  if  the  depositor  himself  be  free  of  blame 
and  has  done  nothing  to  mislead  the  bank,  all  the  loss  must  be 
borne  by  the  bank  for  it  acts  at  its  peril."  2  In  the  second  place, 

1  1879,  51  Md.  562,  585 ;   34  Am.  Rep.  325. 

2  See,  however,  Cooke  v.  United  States,  1875,  91  U.  S.  389.     Action 
to  recover  money  paid  by  the  Assistant  Treasurer  of  the  United  States 
in  New  York  for  the  redemption  of  treasury  notes  which  are  now  alleged 
to   be   counterfeit.     WAITE,  C.J.   (p.  396):  "It   is,  undoubtedly,  also 
true,  as  a  general  rule  of  commercial  law,   that  where  one  accepts 
forged  paper  purporting  to  be  his  own,  and  pays  it  to  a  holder  for 
value,  he  cannot  recall  the  payment.     The  operative  fact  in  this  rule 
is  the  acceptance,  or  more  properly,  perhaps,  the  adoption,  of  the 
paper  as  genuine  by  its  apparent  maker.     Often  the  bare  receipt  of 
the  paper  accompanied  by  payment  is  equivalent   to  an  adoption 
within  the  meaning  of  the  rule ;   because,  as  every  man  is  presumed  to 
know  his  own  signature,  and  ought  to  detect  its  forgery  by  simple  in- 
spection, the  examination  which  he  can  give  when  the  demand  upon 
him  is  made  is  all  that  the  law  considers  necessary  for  his  protection. 
He  must  repudiate  it  as  soon  as  he  ought  to  have  discovered  the  for- 
gery, otherwise  he  will  be  regarded  as  accepting  the  paper.     Unneces- 
sary delay  under  such  circumstances  is  unreasonable ;    and  unreason- 
able delay  is  negligence,  which  throws  the  burden  of  the  loss  upon 
him  who  is  guilty  of  it,  rather  than  upon  one  who  is  not.     The  rule  is 
thus  well  stated  in  Gloucester  Bank  v.  Salem  Bank,   17  Mass.  45 : 
'The  party  receiving  such  notes  must  examine  them  as  soon  as  he  has 
opportunity,  and  return  them  immediately :   if  he  does  not,  he  is  neg- 
ligent ;   and  negligence  will  defeat  his  action.' 

"When,  therefore,  a  party  is  entitled  to  something  more  than  a 
mere  inspection  of  the  paper  before  he  can  be  required  to  pass  finally 
upon  its  character,  —  as,  for  example,  an  examination  of  accounts  or 
records  kept  by  him  for  the  purposes  of  verification,  —  negligence 
sufficient  to  charge  him  with  a  loss  cannot  be  claimed  until  this  ex- 
amination ought  to  have  been  completed.  If,  in  the  ordinary  course 
of  business,  this  might  have  been  done  before  payment,  it  ought  to 
have  been,  and  payment  without  it  will  have  the  effect  of  acceptance 

131 


§  84]  FORGED   NEGOTIABLE   INSTRUMENTS  [Part  1 

to  deny  a  recovery  because  the  plaintiff's  mistake  appears  to 
have  been  the  result  of  his  negligence,  is  contrary  to  the 
general  principle  governing  the  recovery  of  benefits  conferred  by 
mistake,  as  has  elsewhere  been  shown  (ante,  §  15). 

§  84.  (3)  The  equal  equities  theory.  —  Professor  Ames  ad- 
vanced and  very  ably  supported  the  view  that  the  drawee  is 
denied  a  recovery,  in  case  the  signature  of  the  drawer  is  forged, 
upon  the  principle  that  as  between  parties  having  equal  equities, 
one  of  whom  must  suffer,  the  legal  title  should  prevail.1 

"The  true  principle,"  he  said,  "upon  which  cases  like  Price  v. 
Neal  are  to  be  supported,  is  that  far-reaching  principle  of  natural 
justice,  that  as  between  two  persons  having  equal  equities,  one 
of  whom  must  suffer,  the  legal  title  shall  prevail.  The  holder 
of  the  bill  of  exchange  paid  away  his  money  when  he  bought 
it ;  the  drawee  parted  with  his  money  when  he  took  up  the  bill. 
Each  paid  in  the  belief  that  the  bill  was  genuine.  In  point  of 
natural  justice  they  are  equally  meritorious.  But  the  holder 
has  the  legal  title  to  the  money.  A  court  of  equity  (and  the 
action  of  assumpsit  for  money  had  and  received  is,  in  substance, 
a  bill  in  equity)  cannot  properly  interfere  to  compel  the  holder 
to  surrender  his  legal  advantage.  The  same  reasoning  applies 
if  the  drawee  has  merely  accepted  the  bill.  The  legal  title  to 
the  acceptance  is  in  the  holder.  A  court  of  equity  ought  not 
to  restrain  the  holder  by  injunction  from  enforcing  his  legal 
right,  nor  should  a  court  of  law  permit  the  acceptor  to  defeat 
his  acceptance  by  an  equitable  defense." 

Professor  Ames'  theory  finds  little  support  in  the  reasoning 
of  judicial  opinions  and  has  been  challenged  by  Professor  Keener 
and  Professor  Wigmore.  The  most  effective  arguments  that 
have  been  urged  against  it  are  substantially  as  follows : 

and  adoption.  But  if  the  presentation  is  made  at  a  time  when,  or  at 
a  place  where,  such  an  examination  cannot  be  had,  time  must  be 
allowed  for  that  purpose ;  and,  if  the  money  is  then  paid,  the  parties, 
the  one  in  paying  and  the  other  in  receiving  payment,  are  to  be  under- 
stood as  agreeing  that  a  receipt  and  payment  under  such  circum- 
stances shall  not  amount  to  an  adoption,  but  that  further  inquiry  may 
be  made,  and,  if  the  paper  is  found  to  be  counterfeit,  it  may  be  re- 
turned within  a  reasonable  time." 

1 "  The  Doctrine  of  Price  v.  Neal,"  4  Harv.  Law  Rev.  297,  299. 

132 


Chap.  V]  THE   EQUAL   EQUITIES   THEORY  [§  84 

1.  That  the  doctrine  that  "  where  equities  are  equal  the  legal 
title  shall  prevail  "  does  not  apply  because  the  competing  equi- 
ties are  not  in  the  same  res. 

2.  That  if  the  doctrine  is  applied  to  cases  of  forgery  of  the 
drawer's  signature,  it  should  also  be  applied  to  cases  of  forged  in- 
dorsements, in  which,  however,  a  recovery  is  generally  permitted. 

In  support  of  the  first  objection,  it  is  pointed  out  that  in  all 
cases  to  which  the  application  of  the  doctrine  is  unquestioned, 
the  equities  are  in  the  same  res.  For  example,  where  B 
and  C  receive  assignments  from  A  of  a  claim  against  X,  it  is 
clear  that  each  has  an  equity  in  the  same  subject  matter  —  the 
debt  of  X.  If  one,  by  collecting  the  debt,  acquires  a  legal  title, 
he  will  not  be  disturbed.  Again,  in  the  case  of  a  contest  between 
the  purchaser  of  land  and  an  equitable  incumbrancer,  the  equity 
of  each  is  in  the  same  subject  matter  —  the  land.  He  who  has 
the  legal  title,  in  addition  to  his  equity,  will  not  be  deprived  of  his 
advantage.  But  in  the  cases  under  consideration  the  holder's 
equity,  which  arises  when  he  buys  the  forged  instrument,  is  in 
the  purchase  price  paid  for  such  instrument,  while  the  drawee's 
equity,  arising  in  an  entirely  separate  transaction,  is  in  the  sum 
paid  to  the  holder.1 

Replying  to  this  criticism,  the  writer  of  a  note  in  the  Har- 
vard Law  Review  says : 2 

"This  criticism  of  the  theory  of  'equal  equities,'  as  explain- 
ing the  doctrine  of  Price  v.  Neal,  seems  to  proceed  on  a  misin- 
terpretation. There  are  no  legal  equities  involved,  in  the  sense 
of  equitable  claims  against  the  same  person  in  respect  to  the 
same  res.  The  doctrine  simply  means  that,  as  between  parties 
equally  meritorious,  a  legal  title  will  not  be  disturbed.  Both 
parties  have  paid  out  their  money  under  an  innocent  mistake 
as  to  the  same  fact ;  but  the  holder  now  has  legal  title  to  the 
money  he  has  received,  or,  in  case  the  bill  has  only  been  ac- 
cepted, to  the  obligation  to  pay.  Consequently  there  is  no 
reason  in  equity  for  depriving  him  of  that  legal  title." 

1  Professor  Wigmore, "  A  Summary  of  Quasi-Contracts,"  25  Am.  Law 
Rev.  695,  706;  Keener,  "Quasi-Contracts,"  pp.  154-8. 

2  16  Harv.  Law  Rev.  514. 

133 


§  84]  FORGED   NEGOTIABLE   INSTRUMENTS  [Part  I 

This  explanation,  it  is  submitted,  does  not  meet  the  objec- 
tion. It  is  true  that  the  holder  and  drawee  successively  pay 
out  their  money  under  a  mistake  as  to  the  same  fact.  But 
there  are  nevertheless  two  entirely  separate  transactions  and 
two  quite  distinct  cases  of  money  paid  under  mistake.  If  the 
holder's  mistake  followed  the  drawee's  and  would  not  occur 
but  for  the  drawee's,  it  might  be  successfully  contended  that, 
since  the  holder  changes  his  position  as  a  result  of  the  drawee's 
act,  justice  would  not  be  served  by  permitting  the  drawee  to 
recover  at  the  holder's  expense  (see  ante,  §  25).  But  the 
holder's  mistake  precedes  the  drawee's  and  cannot  possibly 
be  said  to  result  from  any  act  or  omission  of  the  drawee. 
It  is  the  holder's  own  calamity,  for  which  the  drawee  is  in 
no  way  responsible,  and  affords  no  reason  for  denying  to  the 
drawee  the  right  to  recover  money  innocently  paid  by  him,  in 
a  subsequent  transaction,  to  the  holder.  To  deny  relief  to 
the  drawee  "is  in  effect  to  allow  the  defendant  to  recoup  his 
loss  at  the  expense  of  the  plaintiff,"  l  under  circumstances 
which,  in  the  absence  of  considerations  of  policy,  do  not  war- 
rant such  a  recoupment. 

The  second  objection  was  anticipated  by  Professor  Ames  with 
the  contention  that  the  cases  permitting  a  recovery  of  money 
paid  under  mistake  as  to  the  genuineness  of  an  indorsement  rest 
upon  the  doctrine  of  subrogation.  He  said : 2 

"Here,  too,  it  may  be  urged,  the  equities  are  equal,  and  the 
holder,  having  obtained  the  money,  should  keep  it.  But 
this  case  differs  in  an  important  particular  from  all  the  cases 
hitherto  considered,  and  another  principle  comes  into  play, 
which  overrides  the  rule  as  to  equal  equities.  In  all  the  other 
cases  the  bill  or  note,  however  valueless  it  may  have  been,  be- 
longed to  the  holder.  In  the  case  of  the  forged  indorsement, 
on  the  other  hand,  the  bill  or  note  belongs,  not  to  the  holder, 

1  Keener,  "  Quasi-Contracts,"  p.  156. 

2  4  Harv.  Law  Rev.  307.     See  Title  Guarantee  and  Trust  Co.  v. 
Haven,  1909,  196  N.  Y.  487 ;    89  N.  E.  1082 ;    25  L.  R.  A.  (N.  S.) 
1308,  a  case  where  drawee  (drawer's  name  being  forged)  was  subrogated 
to  assessment  lien  which  had  been  terminated  by  payment  of  check. 

134 


Chap.  V]  THE   CHANGE   OF   POSITION   THEORY  [§  85 

but  to  him  whose  name  was  forged  as  indorser.  The  holder, 
who  bought  the  bill,  was  therefore  guilty  of  a  conversion,  how- 
ever honestly  he  may  have  acted.  When  he  collected  the  bill, 
inasmuch  as  he  obtained  the  money  by  means  of  the  true  owner's 
property,  he  became  a  constructive  trustee  of  the  money  for 
the  benefit  of  the  latter.  The  true  owner  may  therefore  recover 
the  money  as  money  had  and  received  to  his  use.  If  he  recovers 
in  his  action,  the  property  in  the  bill  would  pass  to  the  holder ; 
but  the  bill  would  be  of  no  value  to  him,  for,  if  he  should  seek 
to  collect  it,  he  would  be  met  with  the  defense  that  it  had  been 
paid  to  him  once  already.  If,  on  the  other  hand,  the  true 
owner  prefers  to  proceed  on  the  bill  against  the  maker  or  ac- 
ceptor, he  may  do  so,  and  the  prior  payment  to  the  holder, 
being  made  to  one  without  title,  will  be  no  bar  to  the  action. 
The  maker  or  acceptor,  however,  who  pays  to  the  true  owner, 
is  entitled  to  the  bill,  and  should  be  subrogated  to  the  owner's 
right  to  enforce  the  constructive  trust  against  the  holder, 
and  could  thereby  make  himself  whole.  Consequently,  whatever 
course  the  true  owner  elects  to  pursue,  the  loss  must  ultimately 
fall  on  the  holder." 

This  theory,  like  that  which  is  called  to  the  support  of  Price  v. 
Neal,  has  little  recognition  in  the  adjudged  cases.  And  it  in- 
volves a  straining  of  the  doctrine  of  subrogation,  since  the 
drawee  is  permitted  to  sue  in  his  own  name,  and  without  showing 
payment  to  the  true  owner  of  the  bill.  An  analogy,  however, 
may  be  conceded. 

§  85.  (4)  The  change  of  position  theory.  —  Another  suggested 
reason  for  denying  relief  is  that  in  consequence  of  the  drawee's 
payment  of  the  bill,  the  holder  loses  the  right  of  recourse  against 
prior  indorsers  which  the  dishonor  of  the  bill  would  have  given 
him.  That  is,  as  a  result  of  the  drawee's  mistake  the  holder's 
position  is  so  altered  that  to  permit  a  recovery  from  him  would 
be  to  cause  him  a  loss  which  but  for  the  drawee's  mistake  he 
would  not  have  suffered.1 

This  theory  may  provide  an  adequate  reason  for  denying  a 

1  See  Ames,  "The  Doctrine  of  Price  v.  Neal,"  4  Harv.  Law  Rev. 
297,  299. 

135 


§  86]  FORGED   NEGOTIABLE   INSTRUMENTS  [Part  I 

recovery  where  it  appears  that  there  were  prior  indorsers  and 
that  recourse  against  them  is  lost.  But  as  an  explanation  of 
the  general  rule  it  encounters  a  number  of  cases  in  which  a 
recovery  is  denied  even  though  there  were  no  prior  indorsers,1 
and  it  overlooks  the  fact  that  an  acceptance  alone,  which  of 
course  does  not  release  indorsers,  precludes  the  drawee  from 
setting  up  the  forgery  of  the  drawer's  signature.2 

§  86.  (5)  The  theory  that  there  is  no  mistake  as  to  drawee's 
duty  to  holder.  —  The  denial  of  relief  has  also  been  supported 
upon  the  ground  that,  although  the  payment  is  made  in  mis- 
reliance  upon  a  supposed  duty  to  the  drawer,  there  is  no  mis- 
reliance  upon  a  supposed  duty  to  the  holder,  the  person  to  whom 
the  money  is  paid,  which  is  an  essential  element  of  the  right  to 
recover. 

This  principle  —  that  the  mistake  must  be  as  to  the  plaintiff's 
right  against  or  duty  toward  the  defendant  —  is  offered  by  Pro- 
fessor Wigmore 3  as  one  which  "  seems  to  reconcile  all  of  the 
various  cognate  instances  and  with  a  few  exceptions,  to  lead  to 
the  conclusions  actually  adopted  in  the  majority  of  jurisdic- 
tions," although  he  acknowledges  that  in  the  cases  under  con- 
sideration "  mercantile  custom  or  practical  expediency,  and  not 
any  consistent  legal  principle,  has  usually  been  the  guide  of  the 
courts." 

No  case  of  the  forgery  of  a  drawer's  signature  has  been  found  in 
which  this  theory — that  the  mistake  must  be  as  to  the  plaintiff's 
right  against  or  duty  to  the  defendant  —  has  actually  been  made 
the  basis  of  recovery.  And  while,  as  elsewhere  appears,  the  prin- 

1  Howard  v.  Mississippi  Bank,  1876,  28  La.  Ann.  727 ;  26  Am.  Rep. 
105;    Commercial,  etc.,   Bank  v.  First  Nat.  Bank,  1868,  30  Md.  11; 
96  Am.  Dec.  554 ;   Salt  Springs  Bank  v.  Syracuse  Inst.,  1863,  62  Barb. 
(N.  Y.  Sup.  Ct.)  101;    Levy  v.  U.  S.  Bank,  1802,  1  Binn.  (Pa.)  27; 
Bank  of  St.  Albans  v.  Farmers'  Bank,  1838,  10  Vt.  141 ;   33  Am.  Dec. 
188;   Johnston  t>.  Commercial  Bank,  1885,  27  W.  Va.  343;    55  Am. 
Rep.  315. 

2  See  Young  v.  Lehman,  1879,  63  Ala.  519 ;    Wilson  v.  Alexander, 
1842,  4  111.   (3  Scam.)   392;    Goddard   v.  Merchants'  Bank,    1850,  4 
N.  Y.  147 ;   Johnston  v.  Commercial  Bank,  1885,  27  W.  Va.  343 ;   55 
Am.  Rep.  315. 

3  "A  Summary  of  Quasi-Contracts,"  25  Am.  Law  Rev.  695,  705. 

136 


Chap.  V]      THEORY   THAT   THE   RULE   IS   ONE   OF   POLICY       [§  87 

ciple  has  some  judicial  support,  it  has  been  pointed  out  that 
where,  as  in  this  case,  the  plaintiff's  mistake  is  as  to  his  duty 
to  a  third  person  to  pay  the  money  sought  to  be  recovered,  he 
is  entitled  to  restitution  (ante,  §  19).  Moreover,  to  say  that 
the  drawee  of  a  bill,  in  making  payment  to  the  holder,  relies  upon 
two  separate  duties,  —  one  to  the  drawer  to  pay  the  bill,  and  the 
other  to  the  holder  to  pay  it  to  him,  —  and  that  consequently  if 
the  drawer's  signature  is  not  genuine,  the  mistake  is  as  to  the 
former  duty  and  not  as  to  the  latter,  while  if  an  indorsement  is 
not  genuine,  the  mistake  is  as  to  the  latter  and  not  as  to  the 
former,  is  to  support  a  distinction  which  seems  almost  too 
slender  and  unsubstantial  to  be  practicable. 

§  87.  (6)  The  theory  that  the  rule  is  one  of  policy.  —  None  of 
the  theories  set  forth  in  the  preceding  sections  seems  satisfac- 
torily to  account  for  the  denial  of  relief  to  the  drawee  in  the 
case  of  the  forgery  of  the  drawer's  signature.  The  true  reason 
for  the  rule,  it  is  believed,  is  one  of  policy  —  the  policy  of  main- 
taining confidence  in  the  security  of  negotiable  paper  by  making 
the  time  and  place  of  acceptance  or  payment  the  time  and  place 
for  the  final  settlement,  as  between  drawee  and  holder,  of  the 
question  of  the  genuineness  of  the  drawer's  signature.  In 
most  cases,  conspicuously  where  the  drawee  is  the  drawer's 
banker,  the  business  relations  between  the  drawer  and  drawee 
are  such  that,  not  only  is  the  drawee  thoroughly  familiar  with 
the  drawer's  signature  and  consequently  well  qualified  to  dis- 
cover a  forgery,  but  it  is  peculiarly  convenient  for  him  to  solve 
any  doubt  by  inquiring  of  the  drawer. 

Of  course,  confidence  in  the  security  of  negotiable  paper  would 
be  still  further  strengthened  if  the  same  rule  of  policy  were 
extended  to  cases  of  forged  indorsements.  But  on  the  other 
hand,  such  an  extension  would  work  a  hardship  to  the  drawee, 
for  in  general  he  has  no  closer  relations  with  the  indorsers  than 
has  the  holder,  and  therefore  is  in  no  better  position  to  ascertain 
the  genuineness  of  their  signatures. 

The  view  that  the  denial  of  relief  to  the  drawee  in  the  case  of 
the  forgery  of  the  drawer's  signature  rests  upon  grounds  of  policy 
has  received  most  persuasive  judicial  support.  Lord  MANS- 

137 


§  87]  FORGED   NEGOTIABLE    INSTRUMENTS  [Part  I 

FIELD'S  remark  in  Price  v.  Neal,  that  "  this  was  one  of  those 
cases  that  could  never  be  made  clearer  by  argument,"  suggests 
that  the  origin  of  the  rule  lay  in  the  notion  of  practical  policy 
rather  than  in  that  of  a  definite  legal  principle.  And  in  several 
of  the  strongest  and  most  carefully  considered  cases,  the  rule 
has  been  expressly  declared  to  be  one  of  convenience : 

Germania  Bank  v.  Boutell,  1895,  60  Minn.  189 ;  62  N.  W. 
327 ;  27  L.  R.  A.  635 ;  51  Am.  St.  Rep.  519 :  MITCHELL,  J. 
(p.  193) :  "In  view  of  the  use  of  this  class  of  paper  as  money, 
it  was  considered  that  public  policy  required  that,  as  between 
the  drawee  and  good-faith  holders,  the  drawee  bank  should  be 
deemed  the  place  of  final  settlement  where  all  prior  mistakes  and 
forgeries  should  be  corrected  and  settled  once  for  all,  and,  if 
not  then  corrected,  payment  should  be  treated  as  final;  that 
there  must  be  a  fixed  and  definite  time  and  place  to  adjust 
and  end  these  things  as  to  innocent  holders;  and  that  that 
time  and  place  should  be  the  paying  bank  and  the  date  of  pay- 
ment ;  and  that,  if  not  done  then,  the  failure  to  do  so  must  be 
deemed  the  constructive  fault  of  the  payee  bank,  which  must 
take  the  consequences." 

Dedham  Nat.  Bank  v.  Everett  Nat.  Bank,  1901,  177  Mass. 
392;  59  N.  E.  62;  83  Am.  St.  Rep.  286:  HOLMES,  C.J. 
(p.  395) :  "  Probably  the  rule  was  adopted  from  an  impression 
of  convenience  rather  than  for  any  more  academic  reason."  * 

1  Mr.  Justice  STOKY  said,  in  United  States  Bank  v.  Bank  of  Georgia, 
1825,  10  Wheat.  (U.  S.)  333,  355:  "It  is  sufficient  for  us  to  declare, 
that  we  place  our  judgment  in  the  present  case,  upon  the  ground,  that 
the  defendants  were  bound  to  know  their  own  notes,  and  having  re- 
ceived them,  without  objection,  they  cannot  now  recall  their  assent. 
We  think  this  doctrine  founded  on  public  policy  and  convenience ;  and 
that  actual  loss  is  not  necessary  to  be  proved  —  for  potential  loss  may 
exist,  and  the  law  will  always  presume  a  possible  loss,  in  cases  of  this 
nature." 

PHELPS,  J.,  in  Bank  of  St.  Albans  v.  Farmers'  Bank,  1838,  10  Vt. 
141,  145;  33  Am.  Dec.  188,  said  that  the  drawee  is  "the  person  to 
whom  the  bill  itself  points,  as  the  legitimate  source  of  information  to 
others,  and  if  he  were  permitted  to  dishonor  a  bill,  after  having  once 
honored  it,  the  very  foundation  of  confidence  in  commercial  paper 
would  be  shaken." 

See  also  London,  etc.,  Bank  v.  Bank  of  Liverpool,  [1896]  1  Q.  B.  7, 
10;  Jones  v.  Miners'  &  Merchants'  Bank,  1910,  144  Mo.  App.  428; 
128  S.  W.  829. 

138 


Chap.  V]  MISTAKE   BY   PAYOR   FOR  HONOR  [§  89 

§  88.    (7)  The  rule   criticized.  —  The  doctrine  of   Price  v. 
Neal,  as  it  is  called,  has  by  no  means  escaped  criticism. 

"Many  modern  text  writers,"  said  MITCHELL,  J.,  in  Germania 
Bank  v.  Boutell,1  "some  of  them  of  learning  and  ability,  have 
assailed  the  correctness  of  this  doctrine,  contending  that  the  gen- 
eral rule  as  to  money  paid  under  mistake  of  fact  should  apply,  and 
that  the  law  ought  to  be  that  the  bank,  although  in  fault  in  not 
discovering  the  forgery  of  its  customer's  signature,  can  recover 
even  from  an  innocent  holder,  if  he  will  then  be  in  no  worse  con- 
dition than  if  the  bank  had  refused  to  pay  the  draft  or  check."  2 

In  at  least  one  jurisdiction,  Pennsylvania,  the  rule  has  been 
changed  by  statute,3  and  in  a  few  others  the  courts  have  refused 
to  adopt  it.4 

§  89.  (II)  Mistake  by  payor  for  honor  as  to  genuineness  of 
drawer's  signature.  —  In  the  English  case  of  Wilkinson  v.  John- 
son? one  who  paid  for  honor  a  bill  on  which  the  name  of  the 

1  1895,  60  Minn.  189,  192 ;  62  N.  W.  327 ;  27  L.  R.  A.  635 ;  51  Am. 
St.  Rep.  519. 

2  Citing:  2  Parsons,  "Notes and  Bills,"  80;  Morse,  "Banks,"  c.  33; 
Daniel,  "Negotiable  Instruments,"  c.  42;  9  Am.  Law  Rev.  411 ;  note 
to  People's  Bank  v.  Franklin  Bank,  17  Am.  St.  Rep.  889.     See  also 
dissenting  opinion  of  CANTY,  J.,  in  Germania  Bank  v.  Boutell,  supra; 
Jones  v.  Miners'   and   Merchants'    Bank,   1910,    144   Mo.  App.  428 ; 
128  S.  W.  829,  830 ;   First  Nat.  Bank  v.  Bank  of  Wyndmere,  1906,  15 
N.  D.  299;  108  N.  W.  546;    10  L.  R.  A.  (N.  S.)  49. 

3  Tradesmen's  Nat.  Bank  v.  Third  Nat.  Bank,  1870,  66  Pa.  St.  435  ; 
Chambers  v.  Union  Nat.  Bank,  1875,  78  Pa.  St.  205 ;  People's  Savings 
Bank  v.  Cupps,  1879,  91  Pa.  St.  315. 

4  First  Nat.  Bank  v.  Bank  of  Wyndmere,  1906,  15  N.  D.  299 ;    108 
N.  W.  546;    10  L.   R.  A.  (N.  S.)  49;    American  Express  Co.  v.  State 
Nat.  Bank,  1911,  27  Okl.  824;   113  Pac.  711;    33  L.  R.  A.   (N.  S.) 
188. 

5  1824,  3  Barn.  &  C.  428,  436.     ABBOTT,  C.  J. :    "A  bill  is  carried 
for  payment  to  the  person  whose  name  appears  as  acceptor,  or  as ' 
agent  of  an  acceptor,  entirely  as  a  matter  of  course.  .  .  .     But  it  is 
by  no  means  a  matter  of  course  to  call  upon  a  person  to  pay  a  bill 
for  the  honor  of  an  indorser;    and  such  a  call,  therefore,  imports  on 
the  part  of  the  person  making  it,  that  the  name  of  a  correspondent, 
for  whose  honor  the  payment  is  asked,  is  actually  on  the  bill.     The 
person  thus  called  upon  ought  certainly  to  satisfy  himself  that  the 
name  of  his  correspondent  is  really  on  the  bill ;   but  still  his  attention 

139 


§  90]  FORGED   NEGOTIABLE   INSTRUMENTS  [Part  I 

drawer  was  forged,  was  allowed  to  recover.  There  appears  to 
be  no  reason  for  this  distinction  between  the  case  of  the  ac- 
ceptor and  that  of  the  payor  for  honor,  and  the  American  courts 
have  declined  to  differentiate  them.1  In  Goddard  v.  Merchant's 
Bank,2  however,  one  who  paid  for  honor  was  allowed  to  recover 
upon  the  ground,  apparently,  that  he  paid  without  an  oppor- 
tunity to  inspect  the  bill  for  the  purpose  of  determining  whether 
or  not  it  was  genuine.3 

§  90.    (Ill)  Mistake  as  to  genuineness  of  payor's  signature.  - 
Where  one   pays  to  an  innocent  holder  for  value  a  bill  or 
note  on  which  his  own  name  is  forged,  he  is  usually  denied 
relief : 

Johnston  v.  Commercial  Bank,  1885,  27  W.  Va.  343 ;  55  Am. 
Rep.  315:  JOHNSON,  P.  (p.  359) :  "It  seems  to  us  from  the 
review  of  the  authorities,  that  it  is  a  rule  of  commercial  law  too 
firmly  established  to  be  shaken,  being  sustained  by  an  unbroken 
line  of  authorities  for  more  than  a  century,  that  the  drawee 
of  a  bill  of  exchange  is  presumed  to  know  the  handwriting  of 
the  drawer,  and  a  fortiori  the  maker  of  a  negotiable  note  is 
presumed  to  know  his  own  signature,  and  if  the  drawee  accepts 
or  pays  the  bill,  or  the  maker  pays  the  negotiable  note,  in  the 
hands  of  a  bona  fide  holder,  to  which  the  drawer's  or  maker's 
name  has  been  forged,  he  is  bound  by  the  act  and  cannot  re- 
cover back  the  money  so  paid."  4 

may  reasonably  be  lessened  by  the  assertion,  that  the  call  itself  makes 
to  him  in  fact,  though  no  assertion  may  be  made  in  words." 

1  See   Stephenson  t;.  Mount,   1867,    19   La.  Ann.   295 ;    Goddard  v. 
Merchants'  Bank,  1850,  4  N.  Y.  147 ;    Salt  Springs  Bank  v.  Syracuse 
Savings  Inst.,  1863,  62  Barb.  (N.  Y.  Sup.  Ct.)  101. 

2  1850,  4  N.  Y.  147. 

3  This  case  is  criticized  in  Bernheimer  v.  Marshall,  1858,  2  Minn. 
78 ;   72  Am.  Dec.  79. 

4  Accord :    Mather  v.  Maidstone,    1856,  18  C.  B.  273 ;    Young  v. 
Lehman,  1879,  63  Ala.  519,  523 ;   Tyler  v.  Bailey,  1873,  71  111.  34,  37 ; 
Allen  v.  Sharpe,  1871,  37  Ind.  67,  73;    10  Am.  Rep.  80;   Third  Nat. 
Bank  v.  Allen,  1875,  59  Mo.  310,  315 ;   Jones  v.  Miners'  &  Merchants' 
Bank,  1910,  144  Mo.  App.  428 ;   128  S.  W.  829  ;  Lewis  v.  White's  Bank, 
1882,  27  Hun   (N.  Y.  Sup.  Ct.)  396.     See  Ellis  v.  Ohio  L.  Ins.   Co., 
1885,  4  Ohio  St.  628;    64  Am.  Dec.  610;    Ames,  "The  Doctrine  of 
Price  v.  Neal,"  4  Harv.  Law  Rev.  297,  302. 

140 


Chap.  V]  GENUINENESS   OF   BILL   OF   LADING  [§  91 

The  Supreme  Court  of  Massachusetts,  however,  has  permitted 
a  recovery.1  Upon  the  principle  contended  for  by  Professor 
Wigmore  (ante,  §  86)  the  latter  decision  is  correct,  but  in  any 
other  view,  including  that  which  rests  the  determination  of  these 
cases  upon  the  ground  of  policy,  it  would  seem  that  the  loss 
must  remain  with  the  payor.2 

§91.  (IV)  Mistake  as  to  genuineness  of  bill  of  lading  at- 
tached to  draft.  —  Although  the  acceptor  of  a  draft  obviously 
cannot  be  expected  to  know  the  signature  of  the  carrier's  agent 
on  a  bill  of  lading  accompanying  the  draft,  it  is  held  that  money 
paid  by  the  acceptor  in  reliance  upon  the  genuineness  of  a  forged 
bill  of  lading  may  not  be  recovered.3  In  the  English  case  of 
Leather  v.  Simpson,4  the  decision  appears  to  have  rested  mainly 
upon  the  doctrine  that  where  equities  are  equal  the  legal  title 
should  prevail ; 5  but  in  some  of  the  American  cases  the  point 
is  made  that  the  acceptor's  mistake  is  not  a  mistake  between 
him  and  the  holder,  but  a  mistake  which  affects  his  rela- 
tion to  the  drawer  alone.6  Probably  the  policy  of  conserving 

1  Welch  v.  Goodwin,  1877,  123  Mass.  71 ;  25  Am.  Rep.  24. 

2  In  Wilson,  Admr.   v.  Alexander,  1842,   4   111.   (3  Seam.)  392,  the 
court  said  (p.  395) :   "We  are  of  the  opinion  it  would  be  carrying  the 
rule   to   an   unreasonable   extent,   to   charge   the   administrator  with 
knowledge  of  the  genuineness  of  an  instrument,  to  which  the  name  of 
his  intestate  purports  to  be  affixed,  as  maker." 

3  Robinson  v.  Reynolds,  1841,  2  Q.  B.  196 ;    Leather  v.  Simpson, 
1871,  L.  R.  11  Eq.  398;    Hoffman  v.  Bank  of  Milwaukee,  1870,  12 
Wall.  (U.  S.)  181 ;   Goetz  v.  Bank  of  Kansas  City,  1886,  119  U.  S.  551 ; 
7  S.  Ct.  318 ;   Young  v.  Lehman,  1879,  63  Ala.  519 ;  Varney  v.  Monroe 
Nat.  Bank,  1907,  119  La.  943;  44  So.  753;   13  L.  R.  A.  (N.  S.)  337; 
First  Nat.  Bank  v.  Burkham,  1875,  32  Mich.  328;    Craig  v.  Sibbett, 
1850,  15  Pa.  St.  238;    Randolph  ».  Merchants'  Bank,  1874,  7  Baxt. 
(66  Tenn.)  458. 

4  1871,  L.  R.  11  Eq.  398. 

6  MALINS,  V.  C.,  said  (p.  407) :  "The  equities  between  these  parties 
are  equal ;  the  parties  are  equally  innocent  in  the  transaction ;  they 
have  all  been  imposed  upon ;  but  there  is  this  difference,  that  one  of 
them,  by  the  course  of  the  transaction,  has  been  in  possession  of  the 
money,  and  I  am  at  a  loss  to  see  any  ground  upon  which  I  can  be 
justified  in  making  a  decree  that  that  money  should  be  restored." 

6  See  Hoffman  v.  Bank  of  Milwaukee,  1870,  12  Wall.  (U.  S.)  181, 
190,  191 ;  Goetz  v.  Bank  of  Kansas  City,  1886,  119  U.  S.  551,  556,  557; 
7  S.  Ct.  318 ;  First  Nat.  Bank  ».  Burkham,  1875,  32  Mich.  328. 

141 


§  92]  FORGED   NEGOTIABLE   INSTRUMENTS  [Part  I 

the  security  of  negotiable  paper  has  also  contributed  to  the 
result.1 

§  92.  (V)  Effect  of  negligence.  —  It  is  a  general  rule  that  one 
who  confers  a  benefit  by  mistake  will  not  be  denied  relief  because 
of  the  fact  that  the  mistake  was  the  result  of  his  own  negligence 
(ante,  §  15).  Accordingly,  one  who  pays  negotiable  paper 
which  has  been  altered,  or  upon  which  an  indorsement  has  been 
forged,  should  be  allowed  to  recover  even  though,  in  the  exercise 
of  reasonable  care,  he  ought  to  have  discovered  the  alteration 
or  forgery.2 

Although,  as  has  been  seen  (ante,  §  79),  the  drawee  of  a  bill 
who  pays  in  misreliance  upon  a  forged  signature  of  the  sup- 
posed drawer  is  not  ordinarily  allowed  to  recover,  if  it  appears 
that  the  exercise  of  reasonable  care  by  the  payee  would  have 
resulted  in  the  discovery  of  the  forgery,  restitution  will,  accord- 
ing to  the  weight  of  authority,  be  enforced: 

Ellis  v.  Ohio  Life  Ins.  Co.,  1855,  4  Ohio  St.  628 ;  64  Am.  Dec. 
610 :  Action  by  drawee  to  recover  money  paid  on  a  forged 
check.  The  payee  purchased  the  check  from  a  stranger  with- 
out inquiry  as  to  his  identity  or  his  right  to  the  check.  RANNEY, 
J.  (p.  668) :  "  We  have  nowhere  doubted  the  wisdom  or  policy 
of  the  rule,  which  allows  an  innocent  holder  to  require  the 
drawee  to  pass  upon  the  signature  of  the  drawer,  and  makes 
him  responsible  for  the  decision  he  makes ;  nor  the  justice  of 
permitting  the  former  to  retain  the  money  received  upon  a 
forgery,  when  some  one  must  suffer  by  the  mistake.  But  we 
must  be  better  informed  than  at  present  before  we  shall  be 

1  In  First  Nat.  Bank  v.  Burkham,  1875,  32  Mich.  328,  COOLEY,  J., 
said  (p.  331) :  "The  beauty  and  value  of  the  rules  governing  commercial 
paper  consist  in  their  perfect  certainty  and  reliability ;    they  would 
be  worse  than  useless  if  the  ultimate  responsibility  for  such  paper,  as 
between  payee  and  drawee,  both  acting  in  good  faith,  could  be  made 
to  depend  on  the  motives  which  influenced  the  latter  to  honor  the 
paper." 

2  Nat.  Bank  of  Commerce  v.  Nat.  M.  B.  Assn.,  1873,  55  N.  Y.  211 ; 
14  Am.  Rep.  232,  (but  see  Bank  of  Commerce  v.  Union  Bank,  1850, 
3  N.  Y.  230,  and  Clews  v.  N.  Y.  Nat.  Banking  Assn.,  1882,  89  N.  Y. 
418 ;  42  Am.  Rep.  303) ;  City  Bank  v.  First  Nat.  Bank,  1876,  45  Tex. 
203.     And  see  Imperial  Bank  v.  Bank  of  Hamilton,  [1903],  A.  C.  49. 

142 


Chap.  V]  EFFECT    OF   NEGLIGENCE  [§  92 

able  to  perceive  the  justice  or  propriety  of  permitting  a  holder 
to  profit  by  a  mistake  which  his  own  negligent  disregard  of 
duty  has  contributed  to  induce  the  drawee  to  commit."  1 

But  there  are  cases  to  the  contrary.2 

Negligence  in  the  payment  of  altered  or  forged  negotiable 
paper  should  not  be  confused  with  negligence  in  failing  promptly 
to  give  notice  to  the  payee  upon  the  discovery  of  the  alteration 
or  forgery.  Tardiness  in  giving  such  notice,  if  it  prejudices  the 
defendant,  will  defeat  the  plaintiff's  right  to  restitution,3  and, 
in  some  cases,  prejudice  to  the  defendant  has  been  presumed.4 

1  Accord:   Nat.  Bank  v.  Bangs,  1871,  106  Mass.  441;   8  Am.  Rep. 
349 ;    First  Nat.  Bank  of  Danvers  v.  First  Nat.  Bank  of  Salem,  1890, 
151  Mass.  280 ;    24  N.  E.  44 ;    21  Am.  St.  Rep.  450 ;    State  Bank  v. 
First  Nat.  Bank,  1910,  87  Neb.  351 ;    127  N.  W.  244 ;   29  L.  R.  A. 
(N.  S.)  100 ;  Williamsburgh  Trust  Co.  v.  Turn  Suden,  1907,  120  App. 
Div.  518 ;    105  N.   Y.  Supp.  335 ;    Greenwald  v.  Ford,  1906,  21  S.  D. 
28 ;   109  N.  W.  516 ;   People's  Bank  v.  Franklin  Bank,  1889,  88  Tenn. 
299  ;   12  S.  W.  716 ;  6  L.  R.  A.  724 ;   17  Am.  St.  Rep.  884 ;  Rouvant  ». 
San  Antonio  Nat.  Bank,  1885,  63  Tex.  610 ;  Canadian  Bank  of  Com- 
merce v.  Bingham,  1902,  30  Wash.  484 ;  71  Pac.  43 ;   60  L.  R.  A.  955 
(see  also  s.  c.  1907,  46  Wash.  657 ;  91  Pac.  185).     And  see  Gloucester 
Bank  v.  Salem  Bank,  1820,  17  Mass.  33 ;    First  Nat.  Bank  v.  Ricker, 
1874,  71  111.  439 ;  22  Am.  Rep.  104 ;   Germania  Bank  v.  Boutell,  1895, 
60  Minn.  189 ;  62  N.  W.  327 ;  27  L.  R.  A.  635 ;  51  Am.  St.  Rep.  519 ; 
Ford  v.  People's  Bank,  1906,  74  S.  C.  180 ;  54  S.  E.  204 ;  10  L.  R.  A. 
(N.  S.)  63;   114  Am.  St.  Rep.  986.     But  see  Bank  of  Williamson  v. 
McDowell  County  Bank,  1910,  66  W.  Va.  545 ;  66  S.  E.  761.     In  Bank 
of  Williamson  v.  McDowell  County  Bank,  supra,  it  was  held  that  money 
paid  on  a  forged  check  could  not  be  recovered  if  both  the  drawee  and 
holder  were  negligent. 

2  Howard  v.  Mississippi  Bank,  1876,  28  La.  Ann.  727 ;  26  Am.  Rep. 
105;   Commercial  Bank  v.  First  Nat.  Bank,  1868,  30  Md.  11 ;   96  Am. 
Dec.  554 ;    Bank  of  St.  Albans  v.  Farmers'  Bank,  1838,  10  Vt.  141 ; 
33  Am.  Dec.  188. 

*  Yatesville  Banking  Co.  v.  Fourth  Nat.  Bank,  1911,  Ga.  App.  ; 
72  S.  E.  528  ;  Schroeder  v.  Harvey,  1874,  75  111.  638  ;  Continental  Nat. 
Bank  ».  Metropolitan  Nat.  Bank,  1903,  107  111.  App.  455 ;  Third  Nat. 
Bank.  v.  Allen,  1875,  59  Mo.  310;  Canal  Bank  v.  Bank  of  Albany, 
1841,  1  Hill  (N.  Y.)  287  ;  Ryan  v.  Bank  of  Montreal,  1886,  12  Ont.  39 ; 
Iron  City  Nat.  Bank  v.  Fort  Pitt  Nat.  Bank,  1893,  159  Pa.  St.  46 ;  28 
Atl.  195  (c/.  McNeely  Co.  v.  Bank  of  N.  America,  1908,  221  Pa.  St. 
588;  70  Atl.  891)  ;  City  Bank  v.  First  Nat,  Bank,  1876,  45  Tex.  203. 
See  United  States  v.  Nat.  Exch.  Bank,  1909,  214  U.  S.  302 ;  29  S.  Ct. 
665,  (pension  check). 

4  Continental  Nat.  Bank  v.  Metropolitan  Nat.  Bank,  1903,  107  111. 
App.  455. 

143 


CHAPTER  VI 


MISRELIANCE   ON   CONTRACT   UNENFORCEABLE   BECAUSE   OF 
STATUTE   OP   FRAUDS 

§  93.     In  general. 

§  94.     (I)  Misreliance  on  contract :  Assumption  of  risk :  Mistake  of 
law. 

§  95.     (II)  Retention  of    benefit    inequitable : 
(1)  When  defendant  defaults. 

§  96.         Same :  Effect  of  tender  of  specific  restitution. 

§  97.         Same :  Liability  of  purchaser  or  lessee  of  land  for  use  and  oc- 
cupation. 

§  98.         (2)  When  plaintiff  defaults. 

§  99.         Same  :   In  jurisdictions  where  contract  is  void. 
§  100.     (Ill)  Right  to  restitution  when  neither  party  defaults. 
§  101.     (IV)  Right  to  restitution  when  contract  enforceable  in  equity. 
§  102.         Same  :   Improvements  on  land  by  purchaser  or  lessee. 
§  103.     (V)  Enforcement  of  restitution  not  against  public  policy :  Ad- 

missibility  of  parol  evidence  of  contract. 

§  104.     (VI)  Measure  of  recovery :  Contract  as  evidence  of  value. 
§  105.         Same  :   May  value  of  thing  promised  by  defendant  be  proved  ? 
§  106.         Same :   Deduction  of  benefit  received  by  plaintiff. 
§  107.         Same  :   Improvements  on  land. 
§  108.     (VII)  Necessity  of  demand :  Statute  of  Limitations :  Interest. 

§  93.  In  general.  —  The  provisions  of  the  fourth  and  seven- 
teenth sections  of  the  Statute  of  Frauds,  29  Car.  II.  c.  3, 
which  with  various  modifications  have  been  generally  adopted 
in  America,  are  familiar.1  To  what  contracts  the  statute 
applies  is  a  question  beyond  the  scope  of  this  treatise.2  As  to 
the  effect  of  non-compliance  with  its  provisions,  there  is  a 
divergence  of  authority,  due  chiefly,  perhaps,  to  variations  in 
the  wording  of  the  statute,  but  in  large  measure  to  difference  of 
interpretation.  In  some  jurisdictions  it  is  held  that  contracts 

1  For  the  provisions  of  the  statute  and  a  concise  discussion  of  its 
requirements,  see  Harriman,  "Contracts,"  §§  568,  569,  595-605. 
1  See  Harriman,  ."Contracts,"  §§  570-94. 

144 


Chap.  VI]  IN  GENERAL  [§  93 

within  the  statute  are  utterly  void.1  In  a  larger  number  the 
statute  is  regarded  as  enacting  a  rule  of  remedial  procedure  only, 
and  consequently  affecting,  not  the  validity,  but  only  the  enforce- 
ability  of  contracts  to  which  it  applies.2  Where  the  statute  ex- 
pressly declares  that  certain  contracts,  unless  they  conform  to 
its  requirements,  shall  be  void,  the  first  view  would  seem  to  be 
sound.  But  in  jurisdictions  in  which,  following  the  English 
model,  it  is  provided  that  "  no  action  shall  be  brought  whereby 
to  charge  "  a  promisor,  or  "no  contract  .  .  .  shall  be  allowed 
to  be  good,"  the  second  view  is  to  be  preferred.  In  either 
view  a  contract  within  the  statute  is  unenforceable  —  the  sup- 
posed contract  right  is  unavailable.  A  benefit  conferred  in 
misreliance  upon  such  a  contract  should  therefore  be  restored 
unless  there  are  special  circumstances  which  justify  its  reten- 
tion.3 

1  Feeney  ».  Howard,  1889,  79  Cal.  525;   21  Pac.  984;   4  L.  R.  A. 
826 ;    12  Am.  St.  Rep.  162  (but  see  Nunez  v.  Morgan,  1888,  77  Cal. 
427,  432 ;   19  Pac.  753) ;   Raub  ».  Smith,  1886,  61  Mich.  543  ;  28  N.  W. 
676;    1  Am.  St.  Rep.  619;    Houghtaling  v.  Ball,  1855,  20  Mo.  563; 
Dung  v.  Parker,  1873,  52  N.  Y.  494 ;    Madigan  v.  Walsh,  1868,  22  Wis. 
501.     For  a  collection  of  statutory  provisions  and  cases,  see  29  Am.  & 
Eng.  Ency.  814. 

2  Leroux  v.  Brown,  1852,  12  C.  B.  801 ;    Britain  v.  Rossiter,  1879, 
11  Q.  B.  D.  123;    Obear  v.  Bank,  1895,  97  Ga.  587;    25  S.  E.  335; 
33  L.  R.  A.  384 ;  Ames  v.  Ames,  1910,  46  Ind.  App.  597 ;  91  N.  E.  509  ; 
Merchant  v.  O'Rourke,  1900,  111  la.  351 ;  82  N.  W.  759;  Townsend  v. 
Hargraves,  1875,  118  Mass.  325 ;   Philbrook  v.  Belknap,   1834,  6  Vt. 
383.     For  a  collection  of  statutory  provisions  and  cases,  see  29  Am.  & 
Eng.  Ency."  814. 

The  theory  of  unenforceability  is  often  less  accurately  expressed  by 
the  use  of  the  term  "voidable."  See,  for  example,  Collins  v.  Thayer, 
1874,  74  111.  138.  Again  it  is  frequently  said  that  the  statute  enacts 
a  rule  of  evidence.  See  Maddison  v.  Alderson,  1883,  8  App.  Cas. 
467,  488;  Townsend  v.  Hargraves,  1875,  118  Mass.  325;  Crane  v. 
Powell,  1893,  139  N.  Y.  379 ;  34  N.  E.  911.  But  the  language  of  the 
English  statute,  as  well  as  the  rule  that  the  statute  must  be  affirma- 
tively pleaded  and  the  holding  that  a  memorandum  made  after  the 
commencement  of  the  action  will  not  satisfy  the  statute,  indicate  that 
it  is  more  than  a  mere  rule  of  evidence.  See  Williston,  "  Sales,"  §  71. 

3  In  a  recent  New  York  case  it  appeared  that  the  plaintiff  had  entered 
into  an  oral  contract  under  which  he  had  rendered  services  to  the  other 
party,  who  had  died  after  the  plaintiff's  action  on  the  contract  had 
been  commenced.     The  plaintiff,  as  a  result  of  the  death  of  the  other 

145 


§  94]          MISRELIANCE  ON  UNENFORCEABLE  CONTRACT      [Part  I 

§  94.  (I)  Misreliance  on  Contract :  Assumption  of  risk  :  Mis- 
take of  law.  —  If,  in  performing  a  contract  unenforceable  be- 
cause of  the  Statute  of  Frauds,  one  is  unconscious  of  any  ques- 
tion as  to  its  enforceability,  his  performance  may  properly  be 
said  to  be  in  misreliance  on  the  contract  (ante,  §  10).  And  the 
fact  that  one's  ignorance  of  the  unenforceability  of  his  contract 
is  due  to  his  own  negligence  is  generally  immaterial  (ante,  §  15). 
But  if  one  believes  his  contract  to  be  unenforceable,  or  indeed  is 
conscious  of  a  doubt  as  to  its  enforceability,  he  assumes  the  risk 
and  cannot  be  said  to  rely  upon  the  contract  (ante,  §  16).  No 
case  arising  out  of  a  contract  unenforceable  because  of  the  Stat- 
ute of  Frauds  has  been  found  in  which  the  denial  of  relief  is 
placed  squarely  upon  this  ground.  This  is  probably  due  in 
part  to  a  failure  to  realize  that  the  obligation  to  make  restitution 
rests  upon  the  doctrine  of  misreliance,  and  in  part  to  the  fact 
that,  unless  the  question  of  enforceability  is  a  subject  of  com- 
munication between  the  parties,  the  state  of  the  plaintiff's  mind 
on  the  question  is  difficult  of  satisfactory  proof. 

In  many  cases  of  misreliance  upon  a  contract  unenforceable 
because  of  the  Statute  of  Frauds,  the  mistake  is  a  mistake  of 
law,  resulting  either  from  ignorance  of  the  existence  of  the 
statute  or  from  a  misconception  of  the  extent  of  its  application. 
As  elsewhere  appears  (ante,  §  35),  in  nearly  all  jurisdictions 
money  paid  under  a  mistake  of  law  is  not  recoverable.  But 
the  applicability  of  the  rule  to  these  cases  appears  to  have  been 
generally  overlooked.1 

party  to  the  contract,  could  not  testify  as  to  its  terms,  and  sought  to 
amend  his  complaint  so  as  to  recover  in  quantum  meruit.  The  motion 
was  denied.  Donovan  v.  Harriman,  1910,  139  App.  Div.  586;  124 
N.  Y.  Supp.  194.  While  the  contract  in  this  case  was  not  within  the 
Statute  of  Frauds  it  was  unenforceable  because  of  a  rule  of  evidence,  and 
it  is  submitted  that  the  plaintiff  was  entitled  to  relief  under  the  doctrine 
of  this  chapter. 

1  In  Thomas  v.  Brown,  1876,  L.  R.  1  Q.  B.  D.  714,  the  point  was 
made.  It  was  an  action  to  recover  a  deposit  made  under  contract  to 
buy  leasehold.  The  plaintiff  repudiated  the  contract  on  the  ground  that, 
because  the  vendor's  name  did  not  appear  in  the  contract,  the  memoran- 
dum was  insufficient  to  satisfy  the  Statute  of  Frauds.  MELLOR,  J. 
(p.  721) :  "First,  on  the  face  of  these  conditions  of  sale,  it  is  obvious  that 

146 


Chap.  VI]      RETENTION   OF   BENEFIT   INEQUITABLE  [§  95 

§  95.  (II)  Retention  of  benefit  inequitable  :  (1)  When  defend- 
ant defaults.  —  When  it  is  the  defendant  who  fails  to  perform 
the  unenforceable  agreement,  the  plaintiff  being  willing  to  con- 
tinue performance,  the  retention  by  the  defendant  of  the  benefit 
of  the  plaintiff's  performance  is  manifestly  unjust : 

Richards  v.  Allen,  1840, 17  Me.  296 :  Assumpsit  for  the  value 
of  bricks  and  oxen  delivered  in  part  payment  under  an  oral 
contract  to  purchase  land  which  the  defendant  repudiated. 
WESTON,  C.J.  (p.  299) :  "The  contract  between  the  parties 
in  regard  to  the  farm  was  one,  which  being  by  parol,  could 
not  be  enforced  at  law.  It  was,  however,  morally  binding ; 
and  payments  made  by  the  plaintiff,  on  account  of  the  purchase, 
could  not  be  reclaimed  so  long  as  the  defendant  was  in  no  fault. 
But  if  he,  without  any  justifiable  cause,  repudiated  the  contract, 
and  refused  to  be  bound  by  it,  a  right  of  reclamation  would 
accrue  to  the  plaintiff,  to  the  extent  required  by  the  principles 
of  justice  and  equity." 

The  obligation  to  make  restitution,  under  such  circumstances, 
has  been  enforced  in  a  great  number  and  variety  of  cases.  Money 
paid,1  either  under  an  oral  contract  for  the  sale  of  an  interest  in 

the  plaintiff  paid  the  deposit  knowing  at  the  time  that  the  name  of  the 
defendant  did  not  appear  on  the  memorandum  of  agreement  otherwise 
than  as  'the  vendor.'  She  voluntarily  paid  the  £70,  with  full  knowl- 
edge that  the  vendor's  name  was  not  disclosed  on  the  contract,  and  so 
far  accepted  the  description  as  sufficient.  ...  In  an  action  like  the 
present,  for  money  had  and  received,  the  plaintiff  can  only  recover 
money  paid  without  knowledge  of  the  real  facts  —  in  ignorance  of 
facts  which,  if  they  had  been  known,  would  have  left  the  plaintiff  an 
option  whether  she  would  pay  or  not.  ...  It  is  unnecessary  to  allude 
to  the  difference  between  ignorance  of  the  law  and  ignorance  of  the 
facts." 

1  Contract  for  sale  of  land :  Frey  v.  Stangl,  1910,  148  la.  522 ; 
125  N.  W.  868 ;  Brashear  v.  Rabenstein,  1905,  71  Kan.  455 ;  80  Pac. 
950;  Jellison  v.  Jordan,  1878,  68  Me.  373;  Cook  v.  Doggett,  1861, 
2  Allen  (Mass.)  439 ;  Pressnell  v.  Lundin,  1890,  44  Minn.  551 ;  47  N.  W. 
161 ;  Interstate  Hotel  Co.  v.  Woodward,  etc.,  Co.,  1903,  103  Mo.  App. 
198;  77  S.  W.  114;  Whitaker  v.  Burrows,  1893,  71  Hun  478;  24  N.  Y. 
Supp.  1011 ;  WilMe  v.  Womble,  1884,  90  N.  C.  254;  Durham  v.  Wick, 
1904,  210  Pa.  St.  128 ;  59  Atl.  824 ;  105  Am.  St.  Rep.  789  ;  Thomas 
v.  Sowards,  1870,  25  Wis.  631.  For  additional  cases,  see  29  Am.  & 
Eng.  Ency.,  838. 

147 


§  95]          MISRELIANCE  ON  UNENFORCEABLE  CONTRACT      [Part  I 

land  or  under  an  oral  contract  not  to  be  performed  within  a  year, 
appears  to  be  everywhere  recoverable.  The  same  is  true  of  the 
value  of  services  rendered.1  Cases  of  property  transferred  in  per- 
f ormance  of  a  contract  within  the  statute  are  not  quite  so  fre- 
quent, but  the  authorities  agree  that  restitution  in  value  may 
be  enforced^ 

The  purchaser  has  also  a  lien  in  equity  'for  the  money  paid  :  Lyttle 
v.  Davidson,  1902,  23  Ky.  Law  Rep.  2262;  67  S.  W.  34;  Devore  v. 
Devore,  1897,  138  Mo.  181 ;  39  S.  W.  68 ;  Vaughn  v.  Vaughn,  1898, 
100  Tenn.  282 ;  45  S.  W.  677. 

Contract  not  to  be  performed  within  one  year:  Knowlman  v.  Bluett, 
1874,  L.  R.  9  Exch.  307 ;  Swift  v.  Swift,  1873,  46  Cal.  266 ;  Weber  v. 
Weber,  1903,  25  Ky.  Law  Rep.  908 ;  76  S.  W.  507 ;  Binion  ».  Brown- 
ing, 1858,  26  Mo.  270 ;  Bowman  v.  Wade,  1909,  54  Or.  347 ;  103  Pao. 
72.  See  Montague  v.  Garnett,  1867,  3  Bush  (66  Ky.)  297. 

1  Contract  for  sale  of  land:   Hull  v.  Thorns,   1910,  82  Conn.  647; 
74  Atl.  925,  (devise) ;  Mills  v.  Joiner,  1884,  20  Fla.  479 ;    Flowers  v. 
Poorman,  1909,  43  Ind.  App.  528;   87  N.  E.  1107;    Stout's  Admr.  ». 
Royston,  1908,  32  Ky.  Law  Rep.  1055 ;    107  S.  W.  784 ;   McDaniel  v. 
Hutcherson,  1910,  136  Ky.  412 ;  124  S.  W.  384,  (devise) ;  In  re  Williams, 
1895,  106  Mich.  490 ;    64  N.  W.  490,  (devise) ;  Cozad  v.  Elam,  1905, 
115  Mo.  App.  136 ;  91  S.  W.  434 ;  Gay  v.  Moonev.  1901.  67  N.  J.  L.  27  ; 
50  Atl.  596,  (devise) ;  King*;.  Brown,  1842,  2  Hill  (N.  Y.)  485  ;  Graham 
v.  Graham,  1909,  134  App.  Div.  777;  119  N.  Y.  Supp.  1013;  Stevens' 
Exrs.  v.  Lee,  1888,  70  Tex.  279 ;   8  S.  W.  40,  (devise) ;  McCrowell  v. 
Burson,   1884,  79  Va.  290;    Taylor  v.  Thieman,   1907,   132  Wis.  38; 
111  N.  W.  229;   122  Am.  St.  Rep.  943  (devise).     For  additional  cases, 
see  29  Am.  &  Eng.  Ency.,  839. 

Contract  not  to  be  performed  within  one  year:  Knowlman  v.  Bluett, 
1874,  L.  R.  9  Exch.  307;  Franklin  v.  Matoa,  etc.,  Min.  Co.,  1907, 
158  Fed.  941 ;  86  C.  C.  A.  145 ;  16  L.  R.  A.  (N.  S.)  381 ;  Frazer  ». 
Howe,  1883,  106  111.  563 ;  Wonsettler  v.  Lee,  1888,  40  Kan.  367 ;  19  Pae. 
862;  Chapman  v.  Rich.  1874,  63  Me.  588;  Williams  ».  Bemis,  1871, 
108  Mass.  91 ;  11  Am.  Rep.  318;  Giles  v.  McEwan,  1896,  11  Manitoba 
150 ;  Cadman  v.  Markle,  1889,  76  Mich.  448  ;  43  N.  W.  315 ;  5  L.  R.  A. 
707  ;  Spinney  ».  Hill,  1900,  81  Minn.  316 ;  84  N.  W.  116 ;  Lockwood  ». 
Barnes,  1842,  3  Hill  (N.  Y.)  128;  38  Am.  Dec.  620;  Carter  v.  Brown, 
1871,  3  S.  C.  298.  For  additional  cases,  see  29  Am.  &  Eng.  Ency.  839. 

2  Booker  v.  Wolf,  1902, 195  111.  365 ;  63  N.  E.  265,  (goods) ;  Montague 
0.  Garnett,  1867,  3  Bush  (66  Ky.)  297,  (goods) ;  Bethel  v.  Booth,  1903, 
115  Ky.  145;    72   S.  W.  803,  (assets  and   good  will  of   a  business); 
Richards  v.  Allen,  1840,  17  Me.  296,  (goods) ;  Bassett  v.  Bassett,  1867, 
55  Me.  127,  (lands) ;   Dix  v.  Marcy,  1875,  116  Mass.  416,  (land) ;  Pea- 
body  v.  Fellows,  1901,  177  Mass.  290;   58  N.  E.  1019,  (land);  Crom- 
jgell  v.  Norton,  1906,  193  Mass.  291 ;   79  N.  E.  433;   118  Am.  St7R~ep. 
49"y,  (lahd)j-Todd  v.  Bettingen,  1910,  109  Minn.  493;  124  N.  W.  443, 
(stock) ;  Day  v.  N.  Y.,  etc.,  R.  Co.,  1873,  51  N.  Y.  583,  (land). 

148 


Chap.  VI]      RETENTION   OF   BENEFIT   INEQUITABLE  [§  96 

Benefits  accruing  to  the  defendant,  not  from  the  plaintiff's 
performance  of  the  contract,  but  from  other  acts  of  the  plaintiff 
in  reliance  upon  the  contract,  fall  within  the  principle.  Thus, 
taxes  paid  by  the  purchaser  of  land  under  an  oral  contract  which 
the  vendor  repudiates  or  is  unable  to  perform,  are  recoverable.1 
The  making  of  improvements  on  the  land  by  the  purchaser 
likewise  results  in  quasi  contractual  obligation,  the  extent  of 
which,  however,  will  be  hereafter  separately  considered  (post, 
§  102). 

§  96.  Same  :  Effect  of  tender  of  specific  restitution.  —  In  the 
Vermont  case  of  Hawley  v.  Moody 2  it  was  held  that  one  who 
defaults  after  having  received  personal  property  in  part  per- 
formance of  the  contract  cannot,  without  the  consent  of  the 
other  party,  revest  the  title  of  the  thing  received,  and  may 
be  compelled,  notwithstanding  a  tender  of  specific  restitution, 
to  make  restitution  in  value.  The  plaintiff  orally  contracted 
for  a  lease  of  the  defendant's  premises  and  "paid  the  defendant 
at  the  time  one  hundred  dollars,  in  a  gold  watch."  The  defend- 
ant refused  to  execute  a  lease  and  tendered  the  watch  back  to 
the  plaintiff,  but  the  plaintiff  refused  to  receive  it,  and  it  was 
subsequently  attached  by  one  of  the  plaintiff's  creditors  and 
sold  on  execution  against  him.  In  an  action  of  assumpsit  to 
recover  one  hundred  dollars,  REDFIELD,  J.,  said : 3 

"But  if  the  party  repudiating  the  future  performance  has 
himself  received  advances  which  he  declines  to  pay  for  in  the 
mode  stipulated,  it  is  regarded  as  equitable  that  he  should  refund 
in  the  usual  mode  for  money  had  and  for  goods  sold,  and  it  is 
not  in  his  power  without  the  consent  of  the  other  party,  to  revest 
the  title  of  the  specific  thing  received. 

"This  seems  to  us  the  only  view  consistent  with  general 
principles  applicable  to  the  subject,  or  with  the  decided  cases, 
and  manifestly  just  and  equitable.  If  the  party  has  bought 
goods  which  he  declines  to  pay  for  in  the  mode  stipulated,  and 

1  Holthouse  v.  Rynd,  1893,  155  Pa.  St.  43 ;  25  Atl.  760 ;   Masson  ». 
Swan,  1871,  6  Heisk.  (53  Term.)  450;    Vaughn  v.  Vaughn,  1898,  100 
Tenn.  282;  45  S.  W.  677. 

2  1852,  24  Vt.  603.  s  At  page  606. 

149 


§  96]          MISRELIANCE   ON  UNENFORCEABLE   CONTRACT      [Part  I 

which,  but  for  his  own  act  he  might  do,  he  ought  and  he  must  be 
content  to  pay  in  the  usual  mode  of  paying  for  goods  sold  and 
delivered,  and  this  recovery  may  be  had  under  the  general 
counts." 

This  decision  is  disapproved  by  Professor  Keener  upon  the 
ground  that  the  primary  obligation  of  the  defendant  was  to 
make  specific  restitution  and  that  consequently  the  tender  of 
such  restitution  threw  the  risk  of  subsequent  loss  upon  the 
plaintiff.  He  says : l 

"It  is  submitted  that  the  true  nature  of  the  obligation  is 
that  of  restitution,  the  law  compelling  the  party  who  is  not 
willing  or  able  to  make  specific  restitution,  to  make  restitution 
in  value,  a  court  of  law,  as  distinguished  from  a  court  of  equity, 
having  no  means  by  which  to  compel  the  defendant  to  make 
specific  restitution.  The  true  nature  of  this  obligation  becomes 
more  apparent  if  we  consider  a  case  where,  because  of  the  sub- 
ject matter  of  the  contract,  a  court  of  equity  will  take  juris- 
diction. Take  the  case  of  a  defendant  receiving  from  a  plaintiff 
a  conveyance  of  land,  in  exchange  for  which  he  agrees  orally 
to  convey  to  the  plaintiff  another  piece  of  land.  If  he  refuses 
to  convey  this  land  the  obligation  which  a  court  of  equity  will 
impose  upon  him  is  to  restore  specifically  to  the  plaintiff  that 
which  he  received  from  him,  the  court  treating  him  for  this 
purpose  as  a  constructive  trustee  of  the  land  conveyed  to  him. 
The  obligation  of  specific  restitution  is  imposed  upon  him  for 
the  reason  that  it  is  the  unjust  detention  of  that  piece  of  property 
which  enriches  him  at  the  expense  of  the  plaintiff,  and  therefore 
renders*  his  conduct  inequitable  and  against  conscience.  Now, 
the  fact  that  in  a  given  case  the  subject  matter  of  a  contract 
is  such  that  a  court  of  equity  will  not  take  jurisdiction,  should 
not  change  the  character  of  the  obligation  when  a  court  of  law 
adopting  equitable  principles  attempts  to  give  to  a  plaintiff 
at  law  such  relief  as  its  machinery  enables  it  to  give." 

Conceding  the  force  of  this  argument,2  it  does  not  follow 
that  an  obligation  to  make  specific  restitution  actually  exists 

1  "Quasi-Contracts,"  pp.  286,  287. 

2  See  Ramey  v.  Slone,  1901,  23  Ky.  Law  Rep.  301 ;  62  S.  W.  879,  where 
the  heirs  at  law  of  one  who,  by  assignment  of  title  bonds,  had  transferred 

150 


Chap.  VI]      RETENTION   OF   BENEFIT   INEQUITABLE  [§  97 

at  law.  There  are  few,  if  any,  cases  which  recognize  it,1  and 
the  courts  generally  describe  the  obligation,  not  as  an  obligation 
to  return  the  property  received,  but  as  an  obligation  to  pay  its 
value.2 

§  97.  Same :  Liability  of  purchaser  or  lessee  for  use  and  oc- 
cupation. —  A  purchaser  of  land  under  an  oral  contract,  who  is 
given  possession  by  his  vendor  and  subsequently  defaults,  is 
liable  for  the  value  of  whatever  use  and  occupation  of  the  prem- 
ises he  may  have  enjoyed.3  The  act  of  the  vendor  in  giving 
the  purchaser  possession  without  a  conveyance  of  title  may  not 
be,  strictly  speaking,  a  part  performance  of  the  contract,  but 
it  is  unquestionably  an  act  in  reliance  upon  the  contract,  and 
the  benefit  resulting  to  the  purchaser  raises  an  obligation  to  make 
restitution.  A  lessee  who  occupies  premises  under  an  oral 
lease  within  the  statute  is  similarly  liable.4  In  the  latter  case, 

• 

an  equitable  title  in  land  were  allowed  to  recover  the  land  upon  proof 
that  the  transferee  had  failed  to  perform  his  oral  agreement  to  obtain 
the  conveyance  of  other  lands  to  the  transferor. 

1  In  Keath  v.  Patton,  1829,  2  Stew.  (Ala.)  38,  and  Luey  v.  Bundy, 
1838,  9  N.  H.  298 ;   32  Am.  Dec.  359,  the  plaintiff  was  allowed  to  re- 
cover in  trover  for  the  conversion  of  personal  property  delivered  to  the 
defendant  in  performance  of  an  oral  contract  within  the  Statute  of 
Frauds. 

2  Dix  v.  Marcy,  1875,  116  Mass.  416,  and  Day  v.  New  York,  etc., 
R.  Co.,  1873,  51  N.  Y.  583,  are  typical.     The  former  was  a  case  of  a 
conveyance  of  land,  and  the  court  said  (p.  418) :    "A  person  who  has 
received  a  benefit  under  such  an  agreement,  and  then  repudiates  it, 
is  held  to  pay  for  that  which  he  has  received."     In  the  latter,  likewise 
a  case  of  the  conveyance  of  land,  the  court  said  (p.  590) :  "A  party 
who  has  received  anything  under  such  an  agreement,  and  then  has 
refused  to  perform  it,  ought  in  justice  to  pay  for  what  he  has  received, 
and  hence  the  law  for  the  purpose  of  doing  justice  to  the  other  party 
will  imply  an  assumpsit."     Jarboe  v.  Severin,  1882,  85  Ind.  496,  is  an 
exception  to  the  rule,  the  court  saying  that  the  implied  promise  of  the 
party  in  default  under  the  contract  is  that  he  "will  return  whatever  he 
has  received  thereunder  or  its  value." 

3  Davidson  v.  Ernest,  1845,  7  Ala.  817 ;    Doe  v.  Cockron,  1835,  1 
Scam.   (2  111.)  209 ;   Patterson  v.  Stoddard,  1860,  47  Me.  355 ;  74  Am. 
Dec.  490 ;  Dwight  v.  Cutler,  1855,  3  Mich.  566 ;  64  Am.  Dec.  105. 

4  Smith  v.  Pritchett,  1893,  98  Ala.  649 ;    13  So.  569 ;   King  v.  Wood- 
ruff, 1854,  23  Conn.  56 ;   60  Am.  Dec.  625 ;   Donohue  v.  Chicago  Bank 
Note  Co.,  1890,  37  111.  App.  552;    Talamo  v.  Spitzmiller,  1890,  120 
N.  Y.  37 ;  23  N.  E.  980 ;  8  L.  R.  A.  221 ;  17  Am.  St.  Rep.  607. 

151 


§98]          MISRELIANCE   ON   UNENFORCEABLE   CONTRACT      [Parti 

however,  the  obligation  is  not  strictly  quasi  contractual,  but  is 
incidental  to  the  relation  of  landlord  and  tenant  created  by  the 
lessee's  occupancy  of  the  land  in  subordination  to  the  lessor's 
title  and  with  the  lessor's  consent.1  Although  the  lease  is  said 
to  be  void  or  unenforceable,  the  terms  of  the  lessee's  obligation 
for  use  and  occupation,  including  the  amount  payable  and  the 
time  for  payment,  are  governed  exclusively  by  its  provisions,2 
and  furthermore,  the  lessee  is  ordinarily  liable  for  an  en- 
tire rental  period  whether  or  not  he  continues  throughout 
the  period  actually  to  occupy  the  premises.3  In  substance 
and  effect  this  amounts  to  a  partial  enforcement  of  the  oral 
lease.4 

§  98.  Retention  of  benefit  inequitable :  (2)  When  plaintiff 
defaults.  —  When  it  is  the  plaintiff  who  makes  default  under  the 
unenforceable  contract,  the  defendant  being  willing  to  perform, 
the  justice  of  a  recovery  in  quasi  contract  by  the  plaintiff  is  not 
so  clear.  By  the  weight  of  authority  it  is  held  that  the  conduct 
of  the  plaintiff  in  refusing  to  proceed  under  the  contract  justifies 
the  retention  by  the  defendant  of  the  benefit  of  the  plaintiff's 
part  performance : 

1  Crawford  v.  Jones,  1875,  54  Ala.  459 ;   Donohue  v .  Chicago  Bank 
Note  Co.,  1890,  37  111.  App.  552 ;  Stover  v.  Cadwallader,  1882,  2  Penny. 
(Pa.)  117.     In  Morehead  v.  Watkyns,  1844,  5  B.  Mon.  (44  Ky.)  228, 
231,  it  was  suggested  that  upon  principle  the  lessor  should  recover  the 
value  of  the  estate  whether  or  not  the  lessee  actually  remained  in  occu- 
pation.    This  would  be  purely  quasi  contractual. 

2  Doe  v.  Bell,  1793,  5  Term  R.  471 ;  King  v.  Woodruff,  1854,  23  Conn. 
56 ;   60  Am.  Dec.  625 ;   Donohue  v.  Chicago  Bank  Note  Co.,  1890,  37 
111.  App.  552;    Evans  v.  Wonona  Lumber  Co.,  1883,  30  Minn.  515; 
16  N.  W.  404 ;   Talamo  ».  Spitzmiller,  1890,  120  N.  Y.  37 ;   23  N.  E. 
980 ;  8  L.  R.  A.  221 ;   17  Am.  St.  Rep.  607.     See  Dobbs  v.  Atlas  Ele- 
vator Co.,  1910,  25  S.  D.  177 ;   126  N.  W.  250,  252. 

s  Smallwood  v.  Sheppards,  [1895]  2  Q.  B.  627;  Donohue  v.  Chicago 
Bank  Note  Co.,  1890,  37  111.  App.  552 ;  Laughran  v.  Smith,  1878,  75 
N.  Y.  205 ;  Talamo  v.  Spitzmiller,  1890,  120  N.  Y.  37 ;  23  N.  E.  980 ; 

8  L.  R.  A.  221 ;   17  Am.  St.  Rep.  607. 

4  In  some  cases  it  is  expressly  declared  that  the  statute  will  not 
prevent  the  enforcement  of  an  oral  lease  in  so  far  as  it  has  been  exe- 
cuted. See  Walsh  v.  Colclough,  1893,  56  Fed.  778;  6  C.  C.  A.  114; 

9  U.  S.  App.  537;   Robb  v.  San  Antonio  St.  R.,  1891,  82  Tex.  392;   18 
S.  W.  707. 

152 


Chap.  VI]      RETENTION   OF   BENEFIT   INEQUITABLE  [§  98 

Thomas  v.  Brown,  1876,  1  Q.  B.  D.  714:  Action  to  re- 
cover a  deposit  made  by  the  vendee  under  a  contract  to  buy 
a  leasehold.  The  memorandum  was  claimed  by  the  plaintiff 
to  be  insufficient  to  satisfy  the  Statute  of  Frauds.  MELLOR,  J. 
(p.  722) :  "Now,  is  there  anything  unconscientious  in  the  de- 
fendant keeping  the  money  ?  I  can  see  nothing.  The  break- 
ing off  of  the  agreement  was  not  in  any  sense  the  fault  of  the 
vendor.  He  was  always  ready  and  willing  to  complete  the  pur- 
chase and  execute  a  conveyance,  but  the  vendee  chooses  to 
set  up  this  question  about  the  Statute  of  Frauds,  and  to  say, 
'  Although  I  can  have  the  contract  performed  if  I  please,  I  re- 
pudiate it.'  Under  these  circumstances,  I  think  it  would  be 
quite  monstrous  if  the  plaintiff  could  recover,  and  I  am  glad 
to  think  that  the  authorities  are  all  opposed  to  her  claim." 

Accordingly  neither  money  paid,1  nor  the  value  of  services 
rendered  2  or  of  property  deliveredjMn  part  performance  of  the 
contract  may  be  recovered.  Analogously,  a  purchaser  of  land 
under  an  oral  contract  is  not  liable  for  use  and  occupation  to  a 
vendor  who  refuses  to  convey.4 

1  York  v.  Washburn,  1902,  118  Fed.  316  (C.  C.  Minn.) ;   Crabtree 
v.  Welles,  1857,  19  111.  55,  (but  see  Collins  v.  Thayer,  1874,  74  111.  138) ; 
Gammon  v.  Butler,  1861,  48  Me.  344 ;    Coughlin  v.  Knowles,  1843,  7 
Mete.  (Mass.)  57;  39  Am.  Dec.  759,  (compare  King  v.  Welcome,  1857, 
5  Gray  41) ;  McKinney  ».  Harvie,  1887,  38  Minn.  18;   35   N.  W.  668; 
8  Am.  St.  Rep.  640;   Sims  v.  Hutchins,  1847,  8  Smed.  &  M.  (16  Miss.) 
328,  (but  see  Hairston  v.  Jaudon,  1869,  42  Miss.  380,  386) ;  .Abbott  v. 
Draper,  1847,  4  Denio  (N.  Y.)  51 ;    Collier  v.  Coates,  1854,  17  Barb. 
(N.  Y.  Sup.  Ct.)  471 ;    Hoskins  v.  Mitcheson,   1857,   14  U.  C.  Q.  B. 
(Ont.)  551;    Cobby.  Hall,   1857,  29  Vt.  510;    Johnson?;.  Puget  Mill 
Co.,  1902,  28  Wash.  515 ;  68  Pac.  867. 

2  Swanzey  v.  Moore,  1859,  22  111.  63 ;  74  Am.  Dec.  134,  (but  see  Col- 
lins v.  Thayer,  1874,  74  111.  138) ;    Congdon  v.  Perry,  1859,  13  Gray 
(Mass.)  3,  (compare  King  v.  Welcome,  1857,  5  Gray  41) ;    Kriger  v. 
Leppel,  1889,  42  Minn.  6;    43  N.  W.  484;    Galvin  v.  Prentice,  1871, 
45  N.  Y.  162 ;  6  Am.  Rep.  58 ;  Abbott  tj^Isskip,  1875,  29  Oh.  St.  59 ; 
Shaw  v.  Shaw,  1834,  6  Vt.  69 ;  MaclrT. "Bragg,  1858,  30  Vt.  571. 

3  Venable  v.  Brown,  1876,  31  Ark.  564 ;    Duncan  v.  Baird,  1839, 
8  Dana  (38  Ky.)  101 ;  Lane  v.  Shackford,  1830,  5  N.  H.  130 ;  Dowdle  ». 
Camp,  1815,  12  Johns.  (N.  Y.)  451. 

4  Bell  v.  Ellis,  1832,  1  Stew.  &  P.  (Ala.)  294;   Brown  v.  Randolph, 
1901,  26  Tex.  Civ.  App.  66 ;  62  S.  W.  981.     See  Lucas  v.  McGuire,  1906, 
29  Ky.  Law  Rep.  1068 ;  96  S.  W.  867. 

153 


§  98]          MISRELIANCE   ON  UNENFORCEABLE  CONTRACT      [Part  I 

There  are  a  few  cases,  even  in  jurisdictions  where  a  failure 
to  comply  with  the  requirements  of  the  statute  does  not  com- 
pletely nullify  the  contract,  which  require  the  defendant  to 
make  restitution  notwithstanding  the  plaintiff's  default : 

King  v.  Welcome,  1857,  5  Gray  (Mass.)  41 :  Action  on  a 
quantum  meruit  for  work  done  under  an  oral  contract  not  to  be 
performed  within  a  year.  Plaintiff  made  default.  THOMAS, 
J.  (p.  42) :  "  Upon  the  reason  of  the  thing,  and  looking  at  the 
object  and  purpose  of  the  statute,  the  result  is  clear.  So  far 
as  it  concerns  the  prevention  of  fraud  and  perjury,  the  same 
objection  lies  to  the  parol  contract,  whether  used  for  the  support 
of,  or  in  defense  to  an  action.  The  gist  of  the  matter  is,  that, 
in  a  court  of  law,  and  upon  important  interests,  the  party  shall 
not  avail  himself  of  a  contract  resting  in  words  only,  as  to  which 
the  memories  of  men  are  so  imperfect,  and  the  temptations  to 
fraud  and  perjury  so  great.  .  .  . 

"Looking  at  the  mere  letter  of  the  statute,  the  suggestion  is 
obvious,  that  no  action  is  brought  upon  the  contract.  But  the 
defendant  seeks  to  '  charge  the  plaintiff  therewith,'  to  establish 
it  by  proof,  to  enforce  it  in  a  court  of  law,  and  to  avail  himself 
of  its  provisions.  And  if  the  defense  succeeds,  the  plaintiff 
is  in  effect  charged  with  and  made  to  suffer  for  the  breach  of  a 
contract  which  he  could  not  enforce,  and  which  could  not  be 
enforced  against  him."  1 

The  case  of  King  v.  Wekome,  just  quoted,  is  severely  criti- 
cized by  Professor  Keener,2  whose  principal  arguments  against 
it  may  be  summarized  as  follows :  First,  that  to  refuse  a  re- 
covery would  not  be  "  to  charge  "  the  plaintiff  with  the  con- 

1  Accord:  Comes  v.  Lamson,  1844,  16  Conn.  246,  (services;  contract 
not  to  be  performed  within  one  year) ;    Bently  v.  Smith,  1907, 3  Ga. 
App.  242 ;  59  S.  E.  720,  (services ;  contract  not  to  be  performed  within 
one  year) ;  Bernier  v.  Cabot  Mfg.  Co.,  1880,  71  Me.  506 ;  36  Am.  Rep. 
343,  (services ;  contract  not  to  be  performed  within  one  year) ;  Freeman 
v.  Foss,  1887,  145  Mass.  361 ;    14  N.  E.  141 ;    1  Am.  St.  Rep.  467, 
(services ;   contract  not  to  be  performed  within  one  year).     And  see 
McGartland  v.  Steward,  1860,  2  Houst.  (Del.)  277,  (services;  contract 
not  to  be  performed  within  one  year) ;  Collins  v.  Thayer,  1874,  74  111. 
138,  (contract  for  sale  of  land). 

2  "Quasi-Contracts,"  pp.  234-8. 

154 


Chap.  VI]      RETENTION   OF   BENEFIT   INEQUITABLE  [§  98 

tract,  because  the  phrase  "  to  charge  therewith  "  means  merely 
to  hold  liable  for  a  breach  of  the  contract.  Second,  that  the 
statute  being  intended  only  to  afford  a  defense  when  one  is  sued 
for  a  breach  of  contract,  it  should  be  used  as  a  shield  only,  and 
not  as  a  sword  for  the  enforcement  of  a  demand  which  would 
otherwise  be  refused.  Third,  that  the  case  leads,  in  Massa- 
chusetts, to  the  queer  result  that  one  who  performs  a  con- 
tract within  the  statute  can  recover  only  according  to  the 
terms  of  the  contract,1  while  one  who  refuses  to  perform  can 
recover  the  value  of  his  partial  performance  irrespective  of 
the  contract.2 

The  view  supported  by  Professor  Keener  and  by  the  weight 
of  judicial  authority,  however,  is  likewise  open  to  objection, 
in  that  it  denies  to  one  who  discovers  the  unenforceability  of 
his  contract  after  part  performance,  and  upon  such  discovery 
is  willing  to  reduce  it  to  writing,  the  right  to  compel  the  other 
party  to  the  contract  either  to  make  the  contract  enforceable 
by  reducing  it  to  writing  or  to  restore  the  value  of  the  benefit 
already  received  through  part  performance.  This  hardship 
has  been  recognized.  In  Collier  v.  Coates?  the  court  said : 

"  Cases  of  great  hardship  are  suggested  as  a  reason  for  the 
adoption  of  the  rule  contended  for  by  the  plaintiff's  counsel. 
One  of  which  is,  that  otherwise  the  purchaser  under  such  a 
contract  might  go  on  making  payments  until  the  last;  and 
although  satisfied  his  bargain  is  not  an  advantageous  one,  yet 
bound  to  make  his  payments  or  lose  what  he  has  paid,  while 
the  other  party  all  this  time  is  at  perfect  liberty  to  repudiate 
the  arrangement,  and  may  do  so  at  the  last  moment,  to  the 
serious  injury  of  the  purchaser." 

1  Riley  v.  Williams,  1878,  123  Mass.  506.     See  post,  §  100. 

2  The  case  also  seems  inconsistent  with  Coughh'n  v.  Knowles,  1843, 
7  Mete.  (Mass.)  57 ;  39  Am.  Dec.  759,  holding  that  money  paid  upon 
a  parol  contract  for  the  sale  of  land  cannot  be  recovered  if  the  vendor 
is  willing  to  perform,  and  with  Congdon  t;.  Perry,  1859,  13  Gray  (Mass.) 
3,  holding  that  the  value  of  services  rendered  under  a  parol  contract 
for  the  sale  of  land  cannot  be  recovered  if  the  vendor  is  willing  to  per- 
form.    The  court  attempts  to  distinguish  the  former  case. 

3  1854,  17  Barb.  (N.  Y.)  471,  475. 

155 


§  99]          MISRELIANCE  ON  UNENFORCEABLE  CONTRACT      [Part  I 

In  other  words,  while  by  King  v.  Welcome  a  dishonest  plaintiff 
is  afforded  a  quasi  contractual  remedy  against  an  honest  de- 
fendant, by  the  opposite  view  an  honest  plaintiff  is  refused 
such  a  remedy  against  a  dishonest  defendant. 

Both  evils,  it  is  believed,  may  be  avoided  by  permitting  the 
plaintiff  in  default  to  recover  if  it  appears  that  before  default 
he  requested  the  defendant  to  join  him  in  signing  such  a  written 
memorandum  as  would  comply  with  the  requirements  of  the 
statute,  and  that  the  defendant  refused  or  failed  within  a  reason- 
able time  so  to  do.  Such  a  rule  would  amply  protect  the  de- 
fendant and  at  the  same  time  would  save  the  plaintiff  from  the 
hardship  of  continuing  the  performance  of  a  contract  with  the 
knowledge  that  while  he  can  recover  the  value  of  his  own  per- 
formance, if  he  performs  in  full,  he  cannot  specifically  enforce 
the  contract  or  recover  compensatory  damages  for  its  breach. 

§  99.  Same :  In  jurisdictions  where  contract  is  void.  —  In 
the  jurisdictions  in  which  non-compliance  with  the  require- 
ments of  the  Statute  of  Frauds  is  held  to  invalidate  the  con- 
tract instead  of  making  it  unenforceable,  cases  permitting  a 
plaintiff  in  default  to  recover  the  value  of  the  benefit  conferred 
by  his  part  performance  are  relatively  more  frequent : l 

Nelson  v.  Shelby  Mfg.  Co.,  1892,  96  Ala.' 515;  11  So.  695; 
38  Am.  St.  Rep.  116:  Action  by  plaintiff  in  default  under 
oral  contract  to  buy  land  to  recover  payments  made.  COLE- 
MAN,  J.  (p.  526) :  "  We  find  nothing  in  the  earlier  or  present 
statutes  of  frauds  which  supports  the  conclusion  that  a  contract 
not  enforceable  against  a  vendor  as  provided  in  the  former,  or 
which  is  declared  void  as  to  him  by  the  present  statute,  because 
there  is  no  sufficient  written  note  or  memorandum  of  the  agree- 
ment to  comply  with  its  mandates,  subscribed  by  him,  and  which 
affords  the  vendor  complete  protection  against  his  vendee, 
may,  by  his  election  or  willingness  to  perform,  avoid  the  statute, 
and  convert  a  contract  it  declares  void  into  a  valid  agreement, 

1  Nelson  v.  Shelby  Mfg.  Co.,  1892,  96  Ala.  515 ;  11  So.  695 ;  38  Am. 
St.  Rep.  116;  Scott  v.  Bush,  1873,  26  Mich.  418;  12  Am.  Rep.  311; 
Brandeis  v.  Neustadtl,  1860,  13  Wis.  142 ;  Thomas  v.  Sowards,  1870, 
25  Wis.  631 ;  Salb  v.  Campbell,  1886,  65  Wis.  405 ;  27  N.  W.  45. 

156 


Chap.  VI]  WHEN   NEITHER   PARTY   DEFAULTS  [§  100 

enforceable  against  a  vendee,  who  has  subscribed  no  note  or 
memorandum  of  the  agreement,  and  has  done  no  more  than  pay 
a  part  of  the  purchase  money.  In  such  case,  neither  party  is 
bound,  and  the  contract  is  void  by  the  very  terms  of  the  statute 
itself.  A  contract  void  under  the  statute  of  frauds  is  void  for 
all  purposes." 

Professor  Keener  contends  that  even  though  the  contract 
is  void,  a  recovery  by  a  plaintiff  in  default  is  unjust : l 

"If  it  be  assumed  that  the  statute,  while  not  rendering  the 
contract  illegal,  does  render  it  void,  still  it  would  seem  that 
the  plaintiff  should  not  be  allowed  to  recover  against  a  de- 
fendant not  in  default.  ...  In  such  a  case  the  defendant  seeks 
to  defeat  a  recovery  by  the  plaintiff,  not  because  of  a  contract 
existing  between  them,  but  because  that  which  was  given  to 
him,  it  was  understood,  should  not  be  paid  for,  except  in  a 
certain  event,  and,  therefore,  to  allow  a  recovery  would  be  to 
defeat  the  intention  of  the  parties  as  expressed  between  them." 

The  force  of  Professor  Keener's  argument  cannot  be  denied. 
But  his  view  of  this  case  is  open  to  the  same  criticism  as  was 
urged  against  his  view  of  the  case  of  the  contract  unenforce- 
able but  not  void  —  that  it  practically  compels  the  plaintiff  to 
continue  the  performance  of  an  agreement  he  cannot  enforce. 
A  rule  which  meets  this  objection  has  been  suggested  (ante, 
§  98).  It  should  be  applied,  it  is  believed,  to  the  case  under 
discussion  as  well  as  to  that  arising  under  a  statute  which 
affects  not  the  validity  of  a  contract  but  only  its  enforceability. 
§  100.  (Ill)  Right  to  restitution  when  neither  party  defaults. 
-  If  the  plaintiff  has  completely  performed  the  contract  on 
his  side,  or  has  performed  all  of  the  terms  which  are  conditions 
precedent  to  the  defendant's  obligation,  and  the  defendant  is 
ready  and  willing  to  perform,  the  plaintiff  cannot  refuse  to 
accept  the  defendant's  performance  and  recover  the  value 
of  the  benefit  of  his  own  performance.  The  defendant  offers  to 
the  plaintiff  precisely  that  which  by  the  terms  of  the  contract 
the  plaintiff  had  a  right  to  expect  to  receive,  and  the  element 

1  Keener,  ."Quasi-Con tracts,"  p.  239. 
157 


§  100]       MISRELIANCE   ON  UNENFORCEABLE  CONTRACT      [Part  I 

of  misreliance  upon  the  contract,  essential  to  the  quasi  con- 
tractual cause  of  action,  is  wanting : 

Riley  v.  Williams,  1878,  123  Mass.  506 :  Action  on  quantum 
meruit  for  work  done  under  oral  contract  by  which  the  plaintiff 
was  to  receive  a  lot  of  land  from  the  defendant,  and  certain  black- 
smith's work  from  a  firm  of  blacksmiths.  The  plaintiff  fully  per- 
formed and  then  refused  to  accept  payment  as  stipulated  in  the 
contract.  AMES,  J.  (p.  506) :  "If  he  [plaintiff]  was  to  be  paid 
partly  in  a  lot  of  land  belonging  to  the  female  defendant,  and 
partly  in  blacksmith's  work  to  be  furnished  by  Cameron  and 
Emerson,  and  the  jury  were  satisfied  that  the  defendants  were 
ready  and  willing,  at  all  times  to  convey  the  land  at  its  fair 
market  value,  and  Cameron  and  Emerson  were  always  ready 
to  furnish  the  blacksmith's  work  for  him  when  called  for  at 
agreed  or  reasonable  prices,  it  is  not  for  the  plaintiff  to  object 
that  this  special  contract  was  not  binding  because  it  was  not 
in  writing.  It  was  wholly  immaterial  that  no  action  could  be 
maintained  on  this  special  contract,  because  it  was  not  reduced 
to  writing,  if  the  defendants  were  ready  and  willing  at  all  times 
to  carry  it  into  full  effect.  The  plaintiff  cannot  force  the  de- 
fendants to  take  their  stand  upon  the  statute."  1 

In  Wisconsin,  however,  it  is  held  that  since  the  contract  is 
void  the  plaintiff  may  refuse  to  accept  performance  of  it  and 
insist  upon  restitution : 

Koch  v.  Williams,  1892,  82  Wis.  186;  52  N.  W.  257:  Oral 
contract  that  the  plaintiff  should  render  certain  services  to  the 
defendant,  as  compensation  for  which  the  defendant  was  to  give 
the  plaintiff  certain  real  estate.  The  plaintiff  performed  but 
refused  to  accept  the  real  estate  and  brought  this  action  for 
the  value  of  his  services.  ORTON,  J.  (p.  191) :  "The  plaintiffs, 
having  rendered  valuable  services  to  the  defendants  under  this 
void  contract,  are  entitled  to  recover  what  such  services  were 
reasonably  worth.  This,  at  first  blush,  might  appear  to  be  a 

1  Also :  Day  v.  Wilson,  1882,  83  Ind.  463  ;  43  Am.  Rep.  76,  (purchase 
money  paid);  Galway  v.  Shields,  1877,  66  Mo.  313;  27  Am.  Rep. 
351,  (purchase  money  paid  for  land) ;  Green  v.  R.  Co.,  1877,  77  N.  C.  95, 
(agreement  to  pay  for  wood  by  conveying  land).  But  see  Swift  v. 
Swift,  1873,  46  Cal.  266. 

158 


Chap.  VI]   CONTRACT  ENFORCEABLE  IN  EQUITY       [§  101 

hardship  on  the  defendants,  who  never  agreed  to  pay  for  such 
services  in  money,  and  have  offered  to  pay  according  to  the 
oral  contract  by  a  conveyance  of  the  lot.  But  it  is  inevitable 
from  holding  the  contract  void.  The  statute  must  be  complied 
with  as  long  as  it  is  in  force.  It  is  no  hardship  to  put  such  a 
contract  in  writing,  and  if  parties  suffer  by  not  complying  with 
the  statute  it  is  a  penalty  due  to  their  own  negligence,  and  they 
have  no  reason  to  complain." 

§  101.  (IV)  Right  to  restitution  when  contract  enforceable 
in  equity.  —  It  is  nearly  everywhere  a  settled  doctrine  of  the 
courts  of  equity,  resting  upon  their  jurisdiction  to  prevent  fraud, 
that  an  oral  contract  within  the  statute  will  be  specifically  en- 
forced in  favor  of  one  who  proves  acts  in  reliance  upon  the  con- 
tract which  reasonably  import  the  existence  of  the  contract 
or  are  "  unequivocally  referable  to  the  contract,"  and  which 
make  it  impossible  to  place  him  in  statu  quo.1  The  acts  most 
frequently  relied  upon  are  the  taking  or  giving  of  possession 
under  contracts  for  the  sale  or  lease  of  land,  and  the  making  of 
improvements.  When,  as  the  result  of  these  or  other  sufficient 
acts,  the  contract  becomes  enforceable  in  equity,  though  not 
at  law,  there  may  seem  to  be  little  reason  for  raising  an  obliga- 
tion to  make  restitution,  even  if  the  defendant  defaults.  It 
has  been  held  in  some  jurisdictions  that  no  such  obligation 
exists,  and  that  consequently  neither  money  paid2  nor  the 

1  Maddison  v.  Alderson,  1883,  8  App.  Gas.  467,  476,  (land) ;  Hodson 
v.  Heuland,  [1896]  2  Ch.  428,  (land) ;  Williams  v.  Morris,  1877,  95  U.  S. 
444,  (land) ;  Cooley  v.  Lobdell,  1897, 153  N.  Y.  596 ;  47  N.  E.  783,  (land). 
Contra:  Albea  v.  Griffin,  1838,  2  Dev.  &  Bat.  Eq.  (22  N.  C.)  9,  (land). 
For   additional   cases,    accord   and   contra,   see   Browne,    "Statute   of 
Frauds,"  (5th  ed.),  §448e*seg.;  Wald's  Pollock,  "Contracts"  (Williston's 
ed.),  pp.  790-791. 

2  Cilley  v.  Burkholder,   1879,  41  Mich.  749 ;   3  N.  W.  221 ;  Johnson 
v.  Puget  Mill  Co.,  1902,  28  Wash.  515 ;  68  Pac.  867.     And  see  Dowdle 
t;.  Camp,   1815,   12  Johns.   (N.  Y.)  451.     But  see,  contra:    Smith  v. 
Rogers,  1886,  42  Hun  (N.  Y.  Sup.  Ct.)  110,  (aff.  118  N.  Y.  675;   23 
N.  E.  1146),  and  Whitaker  v.  Burrows,  1893,  71  Hun  478;   24  N.  Y. 
Supp.  1011,  holding  that  the  purchaser  is  not  prevented  from  sueirig 
the  vendor  for  restitution  by  the  fact  that  he  might  enforce  specific 
performance  against  a  subsequent  purchaser  with  knowledge. 

Of  course,  where  the  doctrine  that  part  performance  or  a  change  of 

159 


§  101]       MISRELIANCE  ON  UNENFORCEABLE   CONTRACT      [Part  I 

value  of  services  rendered1  under  such  circumstances  may  be 
recovered.  But  if  a  purchaser  may  elect  to  sue  a  vendor  in 
default  for  restitution  instead  of  for  damages  in  the  case  of 
a  written  contract  (post,  §  262),  it  would  seem  that  in  fairness 
he  should  be  permitted  to  sue  him  for  restitution  instead  of  for 
specific  performance  in  the  case  of  an  oral  contract  within  the 
statute  but  enforceable  in  equity. 

Suppose  that  the  vendor  of  land,  after  such  part  performance 
by  the  purchaser  as  makes  the  contract  enforceable,  but  before 
the  purchaser's  right  to  specific  performance  matures,  conveys  to 
an  innocent  purchaser  for  value.  In  jurisdictions  where,  in 
such  an  event,  the  court  of  equity  will  award  damages  in  lieu 
of  specific  performance,2  the  enforceability  of  his  contract,  in 
a  broad  sense,  is  not  affected.  But  in  jurisdictions  where 
damages  will  not  be  awarded  in  case  the  plaintiff  knows, 
when  he  commences  suit,  that  by  reason  of  a  conveyance  to  an 
innocent  purchaser  he  is  not  entitled  to  specific  performance,3 
the  purchaser's  right  to  enforce  the  contract  may  be  utterly 
lost.  Upon  such  a  showing,  it  seems  probable  that,  at  least 
in  equity,  restitution  would  be  decreed.4 

position  in  reliance  upon  the  contract  makes  it  enforceable  in  equity  is 
rejected,  this  question  cannot  arise.  See  Rhea  v.  Allison,  1859,  3 
Head  (40  Tenn.)  176. 

1  Mahan  v.  Close,   1895,   63  Minn.  21 ;    65  N.   W.  95.     Contra  : 
Reynolds  v.  Reynolds,   1902,  74  Vt.  463 ;   52  Atl.  1036,  in  which  the 
court  said  (p.  466) :   "If  there  was  an  equitable  relief  also,  it  was  for 
the  benefit  of  the  plaintiff,  not  of  the  defendant,  who  cannot  insist  that 
he  should  be  compelled  to  do  what  he  has  been  asked  to  do  and  has 
refused."     See  also  Smith  v.  Hatch,  1865,  46  N.  H.  146,  where  it  was 
hejd  that  upon  the  refusal  of  the  defendant  to  convey,  the  plaintiff  could 
either  enforce  the  contract  or  recover  the  value  of  land  conveyed  by 
him  to  the  defendant. 

2  See  Gupton  v.  Gupton,   1870,  47  Mo.  37;    Pomeroy,  "Specific 
Performance  of  Contracts  "  (2d  ed.),  §  478. 

3  See  Milkman  v.  Ordway,   1870,   106  Mass.   232,   253 ;    Pomeroy, 
"Specific  Performance  of  Contracts  "  (2d  ed.),  §  477. 

4  See  King  v.  Thompson,    1835,   9   Pet.    (U.  S.)  204;    Johnston  v. 
Glancy,  1835,  4  Blackf.  (Ind.)  94;   28  Am.  Dec.  45;  Green  v.  Drum- 
mond,  1869,  31  Md.  71 ;   1  Am.  Rep.  14 ;  Capps  v.  Holt,  1859,  5  Jones' 
Eq.  (58  N.  C.)  153;   Pomeroy,  "Specific  Performance  of  Contracts" 
<2d  ed.),  §  478. 

160 


Chap.  VI]     CONTRACT  ENFORCEABLE  IN  EQUITY      [§  102 

§  102.  Same :  Improvements  on  land  by  purchaser  or  lessee. 
—  In  most  jurisdictions  the  improvement  of  land  by  the  pur- 
chaser under  an  oral  contract  is  an  act  which  enables  him  to 
enforce  the  contract  in  equity.1  Where  this  doctrine  is  accepted 
it  may  be  thought  unnecessary  to  raise  an  obligation  on  the 
part  of  the  vendor  to  pay  for  the  benefit  resulting  from  such  im- 
provements,2 except  in  the  event  of  a  subsequent  conveyance 
to  an  innocent  purchaser  for  value  or  of  some  other  contingency 
that  makes  the  remedy  of  specific  performance  unavailable.3 
On  the  other  hand  where  the  doctrine  is  rejected  the  purchaser 
would  in  every  case  be  without  a  remedy  unless  such  a  quasi- 
contractual  obligation  were  raised.  The  right  to  restitution 
has  therefore  been  recognized,4  though  it  is  said  not  to  be  en- 
forceable at  law.5  When  it  is  the  purchaser  who  is  in  default 
under  the  contract,  it  may  not  be  inequitable  for  the  vendor 
to  retain  the  benefit  derived  by  him  from  the  improvement  of 
his  property.6  But  where  the  purchaser  is  willing  to  proceed 

1  See  Browne,  "Statute  of  Frauds  "  (5th  ed.),  §  487  and  cases  cited. 

2  Reynolds  v.  Johnston,  1854,  13  Tex.  214. 

3  McNamee  v.  Withers,  1872,  37  Md.  171 ;    Welsh  v.  Welsh,  1832, 
5  Ohio  425 ;  Holthouse  v.  Rynd,  1893,  155  Pa.  St.  43  ;  25  Atl.  760. 

4  Fox's  Heirs  v.  Longly,  1818,  1  A.  K.  Marsh  (8  Ky.)  388 ;  Patterson 
v.  Yeaton,  1859,  47  Me.  308,  (Since  the  enactment  of  stat.  1874,  c.  175, 
the  contract  may  be  specifically  enforced.     See  Woodbury  v.  Gardner, 
1885,  77  Me.  68.) ;  Albea  v.  Griffin,  1838,  2  Dev.  &  Bat.  Eq.  (22  N.  C.) 
9 ;  Luron  v.  Badham,  1900,  127  N.  C.  96 ;  37  S.  E.  143  ;  Ford  v.  Stroud, 
1909,  150  N.  C.  362 ;    64  S.  E.  1 ;    Rhea  V.  Allison,  1859,  3  Head  (40 
Tenn.)  176;    Treece  v.  Treece,  1880,  5  Lea  (73  Tenn.)  220;   Ernst  v. 
Schmidt,  1912,         Wash.         ;  119  Pac.  828.    And  see  Bender's  Admrs. 
v.  Bender,  1860,  37  Pa.  St.  419. 

The  purchaser  is  also  held  to  have  a  lien  on  the  land  for  the  amount 
recoverable  by  him.  Brown  v.  East,  1827,  5.  T.  B.  Mon.  (21  Ky.)  405 ; 
McNamee  v.  Withers,  1872,  37  Md.  171 ;  Treece  v.  Treece,  1880,  5  Lea 
(73  Tenn.)  220. 

6  Shreve  v.  Grimes,  1823,  4  Litt.  (14  Ky.)  220;  14  Am.  Dec.  117; 
Orear  v.  Botts,  1843,  3  B.  Mon.  (42  Ky.)  360;  Patterson  v.  Yeaton, 
1859,  47  Me.  308;  Welsh  v.  Welsh,  1832,  5  Ohio  425;  Mathews  v. 
Davis,  1845,  6  Humph.  (25  Tenn.)  324.  For  a  criticism  of  some  of 
these  cases,  see  Keener,  "  Quasi-Contracts,"  pp.  366-371. 

6  Farnam  v.  Davis,  1855,  32  N.  H.  302 ;  Long  v.  Finger,  1876,  74  N.  C. 
.502.  And  see  Gillet  v.  Maynard,  1809,  5  Johns.  (N.  Y.)  85 ;  4  Am.  Dec. 
329.  But  see  Hawkins  v.  Beal,  1836,  4  Dana  (34  Ky.)  4,  6 ;  Masson  v. 

161 


§  102]       MISRELIANCE  ON  UNENFORCEABLE  CONTRACT      [Part  I 

and  it  is  the  vendor  who  makes  default,  the  retention  of  such 
benefit  is  clearly  unjust.  The  improvements  are  made,  it  is 
true,  without  the  vendor's  request  and  exclusively  for  the 
purchaser's  benefit.1  Furthermore  the  improvements  may  seem 
to  the  vendor  neither  profitable  nor  desirable.  But  the  vendor 
has  the  option  to  perform  his  contract,  which  is  morally,  if 
not  legally,  binding  upon  him,  and  if  he  is  unable  or  unwilling 
so  to  do,  he  ought  at  least  to  pay  for  the  enhancement  of  the 
value  of  his  property.  The  measure  of  recovery  will  be  further 
considered  in  another  section  (post,  §  107). 

The  case  of  improvements  made  by  a  lessee  under  an  oral 
lease  within  the  statute  would  seem  to  be  governed  by  the 
same  rules  as  that  of  improvements  made  by  a  purchaser. 
In  the  former  case,  however,  it  frequently  appears  that  the  im- 
provements are  made,  not  upon  the  lessee's  initiative  and 
exclusively  for  the  lessee's  benefit,  but  in  pursuance  of  the 
provisions  of  the  lease  and  as  consideration,  in  whole  or  in  part, 
for  the  lease.  Improvements  thus  required  of  the  lessee  stand 
upon  the  same  footing  as  other  services  rendered  in  performance 
of  an  oral  contract  within  the  statute,  and  the  lessor  cannot  be 
heard  to  say  that  the  improvements  are  of  no  benefit  to  him. 
It  is  held,  consequently,  that  the  lessee  may  recover  at  law 
the  reasonable  value  of  the  labor  and  materials  employed  in 
making  the  betterments,  regardless  of  their  effect  upon  the 
value  of  the  property.2  Neither  purchaser  nor  lessee  may 


Swan,  1871,  6  Heisk.  (53  Tenn.)  450.  In  the  former  case  the  court 
said :  "Had  it  clearly  appeared  that  the  non-execution  of  the  contract 
was  attributable  altogether  to  his  [the  purchaser's]  willful  delinquency 
or  fault,  we  should  be  indisposed  to  concede  to  him  any  right  in  equity 
to  any  compensation  whatever." 

1  See  Cook  v.  Doggett,  1861,  2  Allen  (Mass.)  439;  Smith  v.  Smith, 
1860,  28  N.  J.  L.  208 ;   78  Am.  Dec.  49 ;   Gillet  v.  Maynard,  1809,  5 
Johns.  (N.  Y.)  85;  4  Am.  Dec.  329. 

2  Gray  v.  Hill,   1826,  Ry.  &  M.  420 ;    Pulbrook  v.  Lawes,  1876, 
1  Q.  B.  D.  284 ;  Findley  v.  Wilson,  1823,  3  Litt.  (13  Ky.)  390 ;  14  Am. 
Dec.  72 ;   White  v.  Wieland,  1872,  109  Mass.  291 ;   Parker  v.  Tainter, 
1877,  123  Mass.  185,  (the  court  in  this  case  said  that  the  cost  of  the 
improvements  might  be  recovered) ;  Smith  v.  Smith,  1860,  28  N.  J.  L. 
208 ;  78  Am.  Dec.  49. 

162 


Chap.  VI]  ADMISSION   OF   PAROL   EVIDENCE  [§  103 

recover  for  improvements  if  it  appears  that  notwithstanding 
the  defendant's  refusal  to  perform  the  contract  the  plaintiff 
remains  in  possession  of  the  land.1 

§  103.  (V)  Enforcement  of  restitution  not  against  policy :  Ad- 
missibility  of  parol  evidence  of  contract.  —  While  the  Statute  of 
Frauds  is  in  some  jurisdictions  regarded  as  completely  nullify- 
ing contracts  not  conforming  to  its  requirements  (ante,  §  93), 
it  is  nowhere  held  that  such  contracts  are  illegal  —  that  is  to 
say,  that  the  making  or  performance  of  such  a  contract  is  an 
act  in  violation  of  law.2  There  appears  to  be  no  reason  of 
policy,  therefore,  for  denying  to  a  party  thereto,  in  a  proper 
case,  the  aid  of  the  court  in  obtaining  quasi  contractual  relief, 
or  the  right  to  establish  the  justice  of  his  quasi  contractual 
demand  by  proving  the  terms  of  the  unenforceable  agreement. 
True,  the  evidence  of  the  agreement,  in  such  a  case,  must  be 
oral ;  but  since  the  evidence  is  for  the  purpose  of  proving,  not 
a  contract  as  such,  but  a  transaction  resulting  in  an  unjust 
benefit  to  the  defendant,  its  introduction  would  seem  not  to 
contravene  the  statute.3 

1  Miller  v.  Tobie,  1860,  41  N.  H.  84,  (purchaser) ;  Yates  v.  Bachley, 
1873,  33  Wis.  185. 

2  See  Abbott  v.  Draper,  1847,  4  Den.  (N.  Y.)  51 ;  Collier  v.  Coates, 
1854,  17  Barb.  (N.  Y.)  471 ;  Hawley  v.  Moody,  1852,  24  Vt.  603. 

3  Gay  v.  Mooney,  1901,  67  N.  J.  L.  27,  28  ;  50  Atl.  596.  Action  to 
recover  compensation  for  board  and  lodging  of  plaintiff's  wife's  uncle 
who  resided  with  plaintiff's  family.     DIXON,  J. :  "In  order  to  rebut  a 
presumption  that  the  service  was  rendered  and  received  as  a  gratuity, 
the  plaintiff  put  in  evidence  tending  to  show  an  understanding  between 
himself  and  the  deceased  that  the  latter  would  devise  a  certain  dwelling 
to  the  plaintiff's  children  in  return  for  what  he  should  receive  as  a 
member  of  the  family.     For    such  a  purpose  this  evidence  was  plainly 
legitimate.  .  .  .     Although  the  bargain  between  the  plaintiff  and  the 
intestate  contemplated  payment  to  be  made  to  the  plaintiff's  children, 
and  not  directly  to  himself,  yet,  as  that  bargain  did  not  take  the  form 
of  an  actionable  contract,  it  falls  out  of  view  as  a  ground  of  legal 
remedy,  and  appears  only  to  give  color  to  the  conduct  of  the  parties 
in  furnishing  and  accepting  the  service  rendered.     It  affords  the  means 
of  determining  that  the  service  was  not  a  gift,  but  a  sale,  and  out  of 
that  determination  the  law  deduces  a  right  in  him  who  sold  the  service 
to  be  paid  its  value  by  him  who  bought  it." 

Accord:  Pulbrook  v.  Lawes,  1876,  1  Q.  B.  D.  284;  Frazer  v.  Howe, 
1883,  106  111.  563 ;  Kettry  v.  Thumma,  1894,  9  Ind.  App.  498 ;  36  N.  E. 

163 


§  104]        MISRELIANCE   ON  UNENFORCEABLE  CONTRACT      [Part  I 

§  104.  (VI)  Measure  of  recovery:  Contract  as  evidence  of 
value.  —  Since  the  obligation  under  discussion  is  essentially 
an  obligation  to  restore  a  benefit  received  and  not  to  com- 
pensate for  an  injury  inflicted,  the  value  of  the  benefit  to  the 
defendant,  and  not  the  cost  of  the  plaintiff's  performance  or 
the  extent  of  the  plaintiff's  loss  or  damage  as  a  result  of  the 
defendant's  default,  is  the  measure  of  the  plaintiff's  recovery : 

Dowling  v.  McKenney,  1878,  124  Mass.  478 :  Count  for 
ten  days'  labor  on  a  monument  and  three  days'  services  in  pre- 
paring land  and  foundation  for  same.  The  labor  and  services 
were  performed  under  an  oral  contract  by  which  the  defendant 
was  to  convey  to  the  plaintiff  a  lot  of  land,  and  to  take  in  pay- 
ment a  monument,  when  completed,  and  the  balance  in  money. 
The  plaintiff  completed  the  monument,  but  the  defendant 
repudiated  the  contract  and  refused  to  take  the  monument. 
ENDICOTT,  J.  (p.  481) :  "In  the  case  at  bar,  the  defendant 
received  no  benefit  from  the  labor  performed  in  completing  the 
monument,  although  the  plaintiff  may  have  suffered  a  loss 
because  he  is  unable  to  enforce  his  contract,  and  no  recovery 
can  be  had  for  the  labor  on  the  monument,  as  charged  in  the 
account  annexed  to  the  third  count. 

"But  this  rule  does  not  apply  to  the  item  for  services  per- 
formed by  the  plaintiff  in  preparing  the  land  and  foundation. 
If  this  refers  to  the  lot  of  the  defendant  where  the  monument 
was  to  stand,  and  the  work  was  done  upon  it,  we  cannot  say 
as  a  matter  of  law  that  it  was  not  of  benefit  to  defendant."  l 

It  follows  that  if  the  defendant  has  derived  no  benefit  what- 
ever from  the  plaintiff's  performance  the  plaintiff  has  no  cause 
of  action.  Thus,  where  a  son  worked  for  his  father  on  the  father's 
farm  under  an  unenforceable  contract  with  his  uncle,  it  was 

919;  Flowers  v.  Poorman,  1909,  43  Ind.  App.  528;  87  N.  E.  1107; 
In  re  Williams'  Estate,  1895,  106  Mich.  490 ;  64  N.  W.  490 ;  Estate  of 
Kessler,  1894,  87  Wis.  660 ;  59  N.  W.  129 ;  41  Am.  St.  Rep.  74 ;  Taylor 
».  Thieman,  1907,  132  Wis.  38;  111  N.  W.  229;  122  Am.  St.  Rep.  943. 
1  Also :  Fuller  v.  Reed,  1869,  38  Cal.  99 ;  Riiff  v.  Riibe,  1903,  68 
Neb.  543 ;  94  N.  W.  517 ;  Galvin  v.  Prentice,  1871,  45  N.  Y.  162 ; 
6  Am.  Rep.  58;  Hertzog.  v.  Hertzog's  Admr.  1859,  34  Pa.  St.  418; 
Masson  v.  Swan,  1871,  6  Heisk.  (53  Term.)  450 ;  Pierce  v.  Paine,  1855, 
28  Vt.  34. 

164 


Chap.  VI]  MEASURE   OF   RECOVERY  [§  104 

held  that  the  uncle  was  under  no  quasi  contractual  obligation 
to  pay  the  value  of  such  services,  since  he  had  derived  no  benefit 
from  them.1  For  the  same  reason  one  who,  in  reliance  upon 
an  unenforceable  contract,  constructed  a  wood-chopping 
machine  which  was  not  accepted,  was  denied  a  recovery  for 
the  value  of  the  labor  and  materials  employed.2 

It  follows,  likewise,  that  in  the  case  of  services  rendered  or 
property  transferred  the  amount  of  recovery  is  not  governed 
by  the  contract  price.3  There  are  authorities  to  the  contrary,4 
but  they  rest,  apparently,  upon  the  theory  that  in  so  far  as 
a  contract  within  the  statute  has  been  performed  by  one  party 
before  its  repudiation  by  the  other,  it  may  be  enforced  accord- 
ing to  its  terms.  The  obligation,  in  such  cases,  can  hardly  be 
said  to  be  quasi  contractual. 

Where  the  value  of  the  plaintiff's  performance  exceeds 
the  contract  price,  he  may  realize,  it  is  true,  returns  larger 
than  he  contemplated  when  entering  into  the  contract.  If  it 
is  the  defendant  who  has  refused  to  perform  the  contract,  no 
injustice  results.  The  defendant  suffers  no  loss,  and  moreover, 
if  the  plaintiff's  recovery  were  limited  to  the  contract  rate  the 
defendant  might  actually  profit  by  the  contract  which  he 

1  Bristol  v.  Sutton,  1897,  115  Mich.  365 :  73  N.  W.  424. 

2  Banker  v.  Henderson,  1895,  58  N.  J.  L.  26 ;  32  Atl.  700.     See  also 
Cocheco  Aqueduct  v.  Boston,  etc.,  R.  Co.,  1879,  59  N.  H.  312. 

3  WiUiam,  etc.,  Works  v.  Atkinson,  1873,  68  111.  421 ;    18  Am.  Rep. 
560 ;  Schanzenbach  v.  Brough,  1895,  58  111.  App.  526  ;  Stout's  Admr.  v. 
Royston,  1908,  32  Ky.  Law  Rep.  1055;    107  S.  W.  784;    Emery  v. 
Smith,  1865,  46  N.  H.  151 ;  Hertzog  v.  Hertzog's  Admr.  1859,  34  Pa.  St. 
418.     See  Fuller  v.  Reed,  1869,  38  Cal.  99 ;   Erben  v.  Lorillard,  1859, 
19  N.  Y.  299. 

4  Murphy  v.  De  Haan,  1902,  116  la.  61 ;   89  N.  W.   100;    Sears  v. 
Ohlen,  1911, 144  Ky.  473  ;  139  S.  W.  759  ;  Fuller  v.  Rice,  1884,  52  Mich. 
435  ;  18  N.  W.  204  ;  Spinney  v.  Hill,  1900,  81  Minn.  316 ;  84  N.  W.  116 ; 
Lally  v.  Crookston  Lumber  Co.,  1902,  85  Minn.  257;   88  N.  W.  846. 
And  see  Darknell  v.  Coeur  D'Alene,  etc.,  Trans.  Co.,  1910,  18  Ida.  61 ; 
108  Pac.  536.     In  Spinney  v.  Hill,  supra,  the  court  said  (p.  322) :  "We 
are  compelled  to  admit  that  the  reasoning  on  which  the  doctrine  is 
based  is  not  satisfactory,  and  has  often  been  criticized  as  illogical,  be- 
cause, although  the  statute  denounces  such  agreements  and  deprives 
them  of  all  legal  validity,  the  doctrine  itself  validates  them  to  some 
extent,  and  measures  some  of  the  rights  of  the  parties  by  them." 

165 


§  104]        MISRELIANCE   ON   UNENFORCEABLE   CONTRACT      [Part  I 

refuses  to  perform.  If,  on  the  other  hand,  it  is  the  plaintiff 
who  is  in  default,  the  contract  price  should  ordinarily  be  the 
limit  of  his  recovery  —  assuming,  of  course,  that  he  should 
be  allowed  to  recover  at  all.  Otherwise  he  might  profit  by  his 
default.1  Even  in  the  case  of  a  plaintiff  in  default,  however, 
if  before  defaulting  he  endeavors  to  have  the  oral  contract 
reduced  to  writing  and  the  defendant  refuses  so  to  do,  the  re- 
covery of  the  full  value  of  his  performance,  even  if  it  exceeds 
the  contract  price,  would  seem  to  be  unobjectionable.  For 
while  technically  it  is  the  plaintiff  who  defaults,  the  blame 
attaches  exclusively  to  the  defendant. 

While  the  unenforceable  contract  does  not  afford  the  true 
criterion  for  determining  the  value  of  services  rendered  or  prop- 
erty transferred,  it  ordinarily  does  show  the  amount  of  money 
the  plaintiff  once  declared  himself  willing  to  take  and  which 
the  defendant  once  agreed  to  pay.  It  should  therefore  be  ad- 
mitted, at  the  instance  of  either  party,  in  the  character  not  of 
a  contract  but  of  an  admission  against  interest,  for  the  pur- 
pose of  establishing  the  value  of  such  services  or  property. 
It  has  been  contended  in  some  cases  that  to  permit  the  intro- 
duction of  the  terms  of  the  contract  for  the  purpose  of  assist- 
ing the  plaintiff  in  any  way  is  to  defeat  or  circumvent  the 
statute.2  This  attitude,  if  consistently  assumed,  would  pre- 
vent the  proof  of  the  contract  even  for  the  purpose  of  showing 
that  the  services  rendered  by  the  plaintiff  were  not  intended 
to  be  gratuitous.  It  is  clearly  untenable.  Reasonably  inter- 
preted, the  statute  applies  only  to  the  enforcement  of  oral  con- 

1  See  Keener,  "Quasi-Contracts,"  p.  313  n. 

2  See  McElroy  v.  Ludlum,   1880,  32  N.  J.  Eq.  828,  837,  in  which 
DEPTTE,  J.,  said :  "The  policy  of  the  statute  is  to  prevent  frauds  which 
may  be  accomplished  by  setting  up  contracts  of  the  interdicted  class, 
by  parol  testimony.     That  policy  is  infringed  upon  equally,  whether 
the  contract  be  used  for  the  purpose  of  influencing  the  amount  of  the 
recovery,  or  be  made  the  foundation  of  the  action."     Also,  Sutton  v. 
Rowley,  1880,  44  Mich.  112,  113 ;  6  N.  W.  216 ;  in  which  CAMPBELL,  J., 
said:    "There  being  nothing  in  the  record  to  indicate  that  the  agree- 
ment differs  from  any  other  parol  agreement  concerning  lands,  it  was 
void  and  cannot  be  considered  in  measuring  the  damages  or  for  any 
other  purpose.'' 

166 


Chap.  VI]        MEASURE  OF  RECOVERY  [§  104 

tracts.  It  does  not  relate  to  oral  admissions  against  interest. 
If,  then,  the  same  transaction  happens  to  amount  to  both  an 
oral  contract  and  an  oral  admission,  the  unenforceability  or 
invalidity  of  the  contract  should  not  affect  the  competency  of 
the  admission  as  evidence  of  a  non-contractual  obligation.1 

Care  must  be  exercised,  however,  in  using  a  rate  of  com- 
pensation fixed  in  anticipation  of  full  performance,  for  the 
purpose  of  estimating  the  value  of  part  performance.  Not  in- 
frequently the  several  parts  or  units  of  an  undertaking  are  of 
unequal  value,  and  the  contract  rate  is  evidence,  not  of  the 
value  of  each  unit,  but  of  the  average  value  of  all.  This  is 
nicely  illustrated  in  the  New  York  case  of  Galvin  v.  Prentice,2 
where  the  plaintiff  sought  to  recover  for  services  rendered  under 
an  oral  contract  to  pay  him  certain  weekly  wages  for  three 
years.  The  trial  court  charged  the  jury  that  the  contract, 
although  void,  might  be  considered  prima  facie  evidence  of  the 
value  of  the  services,  but  the  Court  of  Appeals,  after  pointing 
out  that  it  appeared  that  the  plaintiff  was  ignorant  of  the 
business  when  he  entered  upon  the  performance  of  the  con- 
tract, said :  "It  cannot  be  supposed  that  his  work  was  of  the 
same  value  during  the  prior  part  of  the  term  of  his  employment, 
as  it  would  be  during  the  latter  part,  when  his  proficiency  must 
materially  have  increased.  The  price  agreed  upon  for  three 
years,  was  not,  therefore,  competent  evidence  of  the  value 
of  the  services  during  the  first  and  second  years." 

1  Scarisbrick  v.  Parkinson,  1869,  20  L.  T.  175 ;  Clark  v.  Terry,  1856, 
25  Conn.  395;   Giles  v.  McEwan,  1896,  11  Manitoba  150;   Whipple  v. 
Parker,  1874,  29  Mich.  369 :   Moore  v.  Capewell  Horse-Nail  Co.,  1889, 
76  Mich.   606;    43  N.  W.  644.     And  see  Galvin  ».  Prentice,   1871, 
45  N.  Y.  162  ;  6  Am.  Rep.  58.    But  see,  contra,  Sutton  v.   Rowley, 
1880,  44  Mich.  112;    6  N.  W.  216;    Emery  v.  Smith,  1865,  46  N.  H. 
151 ;   Erben  v.  Lorillard,  1859,  19  N.  Y.  299,  302.     In  Clark  v.  Terry, 
supra,  HINMAN,  J.,  said    (p.  401) :  "In  respect  to  the  question  whether 
wages  have  been  earned,which  ought  to  be  paid  for,  and  if  so  to  what 
extent  or  amount,  and  when  the  payment  ought  to  be  made,  it  appears 
to  us  that  all  the  circumstances  under  which  they  are  claimed  to  have 
been  earned,  including  the  contract  under  which  the  service  was  per- 
formed, although  it  may  be  one  that  cannot  be  enforced  by  any  action 
directly  upon  it,  may  and  ought  to  be  considered." 

2  1871,  45  N.  Y.  162,  164;   6  Am.  Rep.  58. 

167 


§  105]        MISRELIANCE   ON  UNENFORCEABLE  CONTRACT      [Part  I 

Another  illustration  of  the  same  point  is  afforded  by  the 
Massachusetts  case  of  Williams  v.  Bemis.1  The  plaintiff 
was  to  cultivate  the  defendant's  land  for  two  years  for  a  share 
of  the  crops,  but  at  the  end  of  the  first  year  the  defendant  paid 
to  the  plaintiff  his  share  of  that  year's  crop  and  refused  to  let 
him  cultivate  the  land  for  the  second  year.  Upon  showing 
that,  as  was  understood  and  anticipated,  the  work  and  materials 
furnished  by  the  plaintiff  during  the  first  year  were  of  greater 
value  than  the  plaintiff's  share  of  that  year's  crops  and  in- 
ured to  the  benefit  of  the  crop  for  the  second  year,  the  plaintiff 
was  permitted  to  recover  the  value  of  such  work  and  materials 
in  excess  of  the  amount  already  received  by  him. 

§  105.  Same  :  May  value  of  thing  promised  by  defendant  be 
proved  ?  —  If  the  defendant  promises  to  pay  a  certain  sum  of 
money  for  the  plaintiff's  performance,  the  terms  of  the  promise 
may  be  shown,  as  has  been  seen  (ante,  §  104),  as  an  admission 
of  the  value  of  the  plaintiff's  performance.  If  the  defendant's 
promise  is  not  to  pay  a  certain  sum  of  money,  but  to  transfer 
property  or  render  services,  may  the  value  of  such  property 
or  services  be  shown  ?  In  the  case  of  a  contract  for  the  exchange 
of  the  plaintiff's  land  for  the  defendant's,  testimony  as  to  the 
value  of  the  defendant's  land  has  been  held  admissible,  as  con- 
stituting, together  with  the  contract,  a  "  practical  admission  " 
that  the  property  conveyed  by  the  plaintiff  was  worth  that 
amount.2  But  in  the  case  of  services  rendered  by  the  plaintiff 
in  consideration  of  a  promise  to  convey  land  or  deliver  goods, 
the  weight  of  authority  is  that  the  value  of  the  property  may 
not  be  shown.3  Where  it  appears  that  at  the  time  the  contract 
was  made  the  extent  of  the  services  to  be  rendered  was  specu- 

1  1871,  108  Mass.  91 ;   11  Am.  Rep.  318. 

2  Bassett  v.  Bassett,  1867,  55  Me.  127. 

3  Fuller  v.  Reed,  1869,  38  Cal.  99 ;    Hillebrands  v.  Nibbelink,  1879, 
40  Mich.  646 ;  Ham.  v.  Goodrich,  1858,  37  N.  H.  185 ;   Erben  ».  Loril- 
lard,  1859,   19  N.  Y.  299,  (disapproving  dictum  in  King  v.  Brown, 
1842,  2  Hill  (N.  Y.)  485) ;   Hertzog  v.  Hertzog's  Admr.,  1859,  34  Pa. 
St.  418,  (overruling  earlier  cases) ;    Ewing  v.  Thompson,  1870,  66  Pa. 
St.  382.     But  see  Bonnon's  Estate  v.  Urton,  1851,  3  G.   Greene  (la.) 
228 ;  Carter  v.  Brown,  1871,  3  S.  C.  298. 

168 


Chap.  VI]  MEASURE   OF   RECOVERY  [§  10G 

lative  —  as,  for  example,  where  one  was  to  serve  another  until 
the  latter's  death  —  this  ruling  is  unquestionably  sound.  In 
such  circumstances  the  promise  of  the  defendant  involves  no 
admission  of  the  value  of  the  plaintiff's  services.  But  where 
it  appears  that  the  extent  of  the  services  to  be  rendered  was 
known  when  the  contract  was  entered  into,  the  propriety  of 
rejecting  such  evidence  may  be  doubted.  The  contract  is 
certainly  an  admission  that  the  plaintiff's  services  were  worth 
the  defendant's  property,  and  testimony  as  to  the  value  of 
the  defendant's  property  is  essential  to  the  interpretation  of 
that  admission  in  terms  of  money. 

Where  it  appears  that  at  the  time  the  contract  was  made 
the  thing  promised  by  the  defendant  was  of  unknown  value  — 
as  where  he  promised  a  percentage  of  the  profits  that  might  be 
made  in  a  business  —  testimony  as  to  its  value,  as  subsequently 
ascertained,  may  properly  be  excluded.1  In  such  a  case,  as 
in  that  where  the  extent  of  the  services  to  be  rendered  by  the 
plaintiff  was  unknown,  it  cannot  be  said  that  the  contract 
contains  any  admission  as  to  the  value  of  the  plaintiff's  per- 
formance. 

§  106.  Same :  Deduction  of  benefit  received  by  plaintiff. 
—  In  order  that  the  judgment  may  not  enrich  the  plaintiff 
at  the  defendant's  expense,  the  value  of  any  benefit  received 
by  the  plaintiff  from  the  defendant  must  be  deducted  from  the 
value  of  that  conferred  by  the  plaintiff  upon  the  defendant : 

Richards  v.  Allen,  1840,  17  Me.  296 :  Oral  contract  to  pur- 
chase land.  WESTON,  C.J.  (p.  300):  "But  the  plaintiff's 
claim  must  be  limited  to  what  is  just  and  reasonable  under  all 
the  circumstances.  He  had  made  some  payments ;  but  he  had 
enjoyed  the  farm  for  eighteen  or  twenty  years.  The  jury  should 
have  been  permitted  to  take  this  into  consideration,  even  with- 
out an  account  in  offset,  as  it  was  necessarily  connected  with 
the  plaintiff's  claim,  and  was  of  a  character  to  affect  and  qual- 

ify  it." 

Ham  v.  Goodrich,  1858,  37  N.  H.  185 :  Services  rendered  under 

1  McElroy  v.  Ludlum,  1880,  32  N.  J.  Eq.  828.  But  see  La  Du-King 
Mfg.  Co.  v.  La  Du,  1887,  36  Minn.  473,  31  N.  W.  938. 

169 


§  106]        MISRELIANCE  ON  UNENFORCEABLE   CONTRACT      [Part  I 

an  oral  contract  that  the  defendant  should  convey  a  farm  to  the 
plaintiff.  EASTMAN,  J.  (p.  190) :  "The  recovery  of  the  plaintiff 
being  founded  upon  the  general  counts,  and  upon  them  alone, 
the  instructions  of  the  court  that  what  he  received  from  the 
farm  as  he  went  along  might  be  applied  in  payment  for  his 
services,  were  correct.  What  did  he  reasonably  deserve  to 
have,  under  all  the  circumstances,  was  the  question." 

Day  v.  N.  7.,  etc.,  R.  Co.,  1873,  51  N.  Y.  583 :  Oral  contract 
by  which  in  consideration  of  the  conveyance  of  land  by  the 
plaintiff,  the  defendant  was  to  give  to  the  plaintiff  the  business 
of  keeping  and  feeding  stock  transported.  The  defendant  gave 
the  business  to  the  plaintiff  for  a  time,  and  then  made  default. 
EARL,  C.  (p.  592) :  "The  defendant  having  repudiated  the  agree- 
ment, the  plaintiff  can  recover  for  his  land  as  if  there  had  been 
no  agreement  as  to  the  amount  of  the  consideration,  but  he  must 
allow  so  much  of  the  consideration  as  has  been  paid ;  and  if  he 
received  more  in  the  profits  of  the  business  which  the  defendant 
brought  him  under  the  agreement  than  the  value  of  his  land, 
he  can  recover  nothing.  If  the  profits  are  less  than  the  value  of 
the  land,  then  he  can  recover  the  balance. 

"It  was  not  necessary  for  the  plaintiff  to  tender  the  profits 
to  the  defendant  before  the  commencement  of  the  action."  1 

The  propriety  of  deducting  the  value  of  the  purchaser's 
use  and  occupation,  in  cases  like  Richards  v.  Allen,  supra,  has 
been  questioned.2  If  the  payments  made  by  the  purchaser, 
it  is  suggested,  are  made  in  exchange  exclusively  for  the  con- 
veyance of  title  by  the  vendor,  and  not  in  part  for  the  prior 
transfer  of  possession,  the  plaintiff's  use  and  occupation  is  not 
a  benefit  conferred  by  the  vendor  in  performance  of  his  contract 
and  in  return  for  the  benefit  received  from  the  purchaser. 
But  the  transfer  of  possession  would  seem  to  be  an  act  in  re- 

1  Also :  Collins  t;.  Thayer,  1874,  74  111.  138 ;  McCracken  v.  Sanders, 
1817,  4  Bibb  (7  Ky.)  511 ;  Chapman  v.  Rich,  1874,  63  Me.  588;  Dix  v. 
Marcy,  1875,  116  Mass.  146;   Miller  v.  Roberts,  1897,  169  Mass.  134; 
47  N.  E.  585;   Masson  v.  Swan,  1871,  6  Heisk,  (53  Tenn.)  450.     See 
Harkness  v.  Mclntire,  1884,  76  Me.  201 ;    Todd  v.  Bettingen,  1910, 
109  Minn.  493 ;    124  N.  W.  443 ;   Graham  v.  Graham,  1909,  134  App. 
Div.  777;    119  N.  Y.  Supp.  1013. 

2  Keener,  "  Quasi-Contracts,"  pp.  283-4. 

170 


Chap.  VI]  MEASURE   OF   RECOVERY  [§  107 

liance  upon  the  contract,  if  not  in  the  performance  of  it.  The 
vendor  is  for  that  reason  allowed  to  recover  for  use  and  occupa- 
tion against  a  purchaser  in  default  (ante,  §  97).  It  follows  that 
where  the  vendor  is  in  default  he  is  entitled  to  a  deduction  of 
the  value  of  such  use  and  occupation  from  the  value  of  any 
benefit  received  by  him. 

§  107.  Same  :  Improvements  on  land.  — As  has  already  been 
pointed  out  (ante,  §  102),  in  the  case  of  improvements  made  by 
the  purchaser  or  lessee  of  land  at  his  own  instance  and  for  his 
own  benefit,  the  seller  or  lessor  is  liable,  if  at  all,  only  to  the 
extent  of  the  enhancement  of  the  value  of  the  land,1  while  in 
the  case  of  improvements  made  by  the  lessee  in  pursuance  of 
the  requirements  of  his  lease  the  lessor  may  be  held  for  the  value 
of  the  labor  and  materials  expended  in  making  the  improve- 
ments, whether  or  not  the  land  is  enhanced  in  value.2  The 
reason  for  the  difference  is  plain.  In  the  former  case  it  cannot 
fairly  be  assumed  that  the  owner  of  the  land  desired  the  im- 
provements or  that  they  are  beneficial  to  him  except  as  they 
have  increased  the  market  value  of  his  property.  In  the  latter, 
since  he  has  required  the  lessee  to  expend  the  labor  and  materials, 
he  cannot  justly  deny  that  he  is  benefited  to  the  extent  of  their 
reasonable  value. 

Where  the  enhancement  in  the  value  of  the  land  consti- 
tutes the  measure  of  recovery  it  should  be  estimated  as  of  the 
time  of  the  surrender  of  the  premises,3  and  the  cost  of  making 
the  improvements  is  legitimate  evidence  as  to  the  extent  of  the 
enhancement.4 

In  every  case,  whether  it  is  the  value  of  the  improvements 
or  merely  the  enhancement  in  the  value  of  the  land  that  may  be 

1  Ford  v.  Stroud,  1909,  150  N.  C.  362 ;    64  S.  E.  1 ;    Matthews  v. 
Davis,  1845,  6  Hump.  (25  Tenn.)  324 ;    Rhea  v.  Allison,  1859,  3  Head 
(40  Tenn.)  176;  Masson  v.  Swan,  1871,  6  Heisk.  (53  Tenn.)  450.     And 
see  Glass  v.  Hampton,  1909,  122  S.  W.  803,  (Ky.). 

2  Pulbrook  v.  Lawes,  1876,  1  Q.  B.  D.  284 ;    Smith  v.  Smith,  1860, 
28  N.  J.  L.  208 ;  78  Am.  Dec.  49.     And  see  cases  cited  ante,  §  102. 

3  Treece  v.  Treece,  1880,  5  Lea  (73  Tenn.)  220.     See  Masson  t;. 
Swan,  1871,  6  Heisk.  (53  Tenn.)  450. 

4  Masson  v.  Swan,  1871,  6  Heisk.  (53  Tenn.),  450. 

171 


§  108]      MISRELIANCE   ON   UNENFORCEABLE   CONTRACT       [Part  I 

recovered,  the  value  of  the  benefit  derived  by  the  plaintiff  from 
the  use  and  occupation  of  the  premises  must  of  course  be 
deducted.1  It  is  sometimes  said  that  the  plaintiff's  profits 
must  be  deducted,2  but  since  the  occupation  is  with  the  consent 
of  the  owner  the  reasonable  value  of  the  land  would  seem  to 
be  the  true  criterion. 

§  108.  (VII)  Necessity  of  demand :  Statute  of  limitations : 
Interest.  —  If  one  who  is  himself  in  default  under  a  contract 
within  the  statute  is  to  be  permitted  under  any  circumstances 
to  recover  the  value  of  his  part  performance  from  one  who  is 
ready  and  willing  to  perform,  a  demand  should  certainly  be 
required  before  suit  brought  (ante,  §  32). 3  On  the  other  hand, 
where  the  action  is  brought  by  one  who  is  willing  to  proceed 
with  performance  against  one  who  fails  or  refuses  to  carry  out 
his  engagement,  a  demand  is  obviously  unnecessary  (ante, 
§  32).  In  such  a  case  the  obligation  arises  when  default  occurs 4 
and  the  statute  of  limitations  runs  from  that  time.6 

If  money  or  property  received  under  a  contract  unen- 
forceable because  of  the  statute  is  used  by  the  recipient, 
the  value  of  such  use  is  a  part  of  the  benefit  that  ought  to 
be  restored.  And, -without  regard  to  the  question  of  use, 
interest  on  the  value  of  the  benefit  received  should  always  be 
allowed  from  the  date  of  the  inception  of  the  obligation,  as 
damages  for  the  failure  promptly  to  perform  it  (see  ante, 

1  McCracken  v.  Sanders,  1817,  4  Bibb  (7  Ky.)  511 ;  Ford  ».  Stroud, 
1909,  150  N.  C.  362 ;    64  S.  E.  1 ;    Treece  v.  Treece,  1880,  5  Lea  (73 
Tenn.)  220;    Clark  v.  Davidson,  1881,  52  Wis.  317;    10  N.  W.  384. 
In  Fox's  Heirs  v.  Longly,  1818,  1  A.  K.  Marsh.  (8  Ky.)  388,  it  was  erro- 
neously said  that  the  plaintiff  was  accountable  for  rents  until  there  was 
a  denial  of  his  right  or  an  assertion  of  title  by  the  vendor. 

2  See  Ford  v.  Stroud,  1909,  150  N.  C.  362 ;  64  S.  E.  1. 

3  Abbott  v.  Draper,  1847,  4  Denio  (N.  Y.)  51 ;   Marsh  v.  Wyckoff, 
1863,  10  Bosw.   (N.  Y.  Superior  Ct.)  202;    Tucker  v.  Grover,  [First 
Case]  1884,  60  Wis.  233 ;   19  N.  W.  92. 

4  Frey  v.  Stangl,  1910,   148  la.  522;   125  N.  W.  868,  870.     Contra: 
Tucker  v.  Grover,  [Second  Case]  1884,  60  Wis.  240 ;  19  N.  W.  62. 

4  Collins  v.  Thayer,  1874,  74  111.  138 ;  Lyttle  v.  Davidson,  1902, 
23  Ky.  Law  Rep.  2262 ;  67  S.  W.  34 ;  Richards  v.  Allen,  1840,  17  Me. 
296 ;  Estate  of  Kessler,  1894,  87  Wis.  660 ;  59  N.  W.  129 ;  41  Am. 
St.  Rep.  74. 

172 


Chap.  VI]  NECESSITY   OF   DEMAND  [§  108 

§  34).  Apparently  without  recognizing  the  distinction  between 
interest  as  a  part  of  the  principal  obligation,  and  interest  as 
damages,  it  has  been  held  that  interest  on  money  paid  may 
be  recovered  from  the  date  of  its  payment.1  As  to  interest 
on  benefits  other  than  money,  it  was  held,  in  a  case  of  a  claim 
for  money  paid  and  services  rendered,  that  interest  was  re- 
coverable only  from  the  date  of  the  commencement  of  the 
action;2  and,  in  a  case  of  property  conveyed,  that  interest 
was  not  recoverable  at  all.3 

1  Reid  v.  Reid,  1911,  141  Ky.  402;  133  S.  W.  219,  (but  see  Pad- 
gett v.  Decter,  1911,   145  Ky.  227;   140  S.  W.  152,  allowing  interest 
from  beginning  of  action  to  eject  plaintiff)  ;  Winters  v.  Elliot,  1878,  1 
Lea  (69  Tenn.)  676 ;  Smoot  v.  Smoot,  1883,  12  Lea  (80  Tenn.)  274 ; 
Vaughn  v.  Vaughn,  1898,  100  Tenn.  282 ;  45  S.  W.  677. 

2  Tucker  v.  Grover,  [Second  Case]  1884,  60  Wis.  240  ;  19  N.  W.  62. 

3  Day  ».  New  York  &c.  Ry.  Co.,  1880,  22  Hun  (N.  Y.  Sup.  Ct.)  412. 


173 


CHAPTER  VII 

MISRELIANCE   ON   CONTRACT   UNENFORCEABLE   BECAUSE   OF 
IMPOSSIBILITY   OF   PERFORMANCE 

§  109.     In  general. 

§  110.  Non-enforceability  may  result  from  prevention:  (1)  of  plain- 
tiff's performance,  or  (2)  of  defendant's  performance. 

§111.     (I)  Plaintiff's  performance  prevented  :   In  general. 

§  112.         (1)  Misreliance  on  contract:   Assumption  of  risk. 

§  113.  Same  :  Presumption  rebuttable. 

§  114.  Same  :  Effect  of  express  stipulation. 

§115.         (2)   Receipt  of  benefit  by  defendant. 

§  116.  (a)   Destruction  of  building  in  course  of  improvement. 

§  117.  Same  :  Upon  principle. 

§  118.  Same  :  Doctrine  of  Niblo  v.  Binsse. 

§  119.  (6)  Destruction  of  personalty  in  course  of  alteration  or 

repair. 

§  120.  (c)  Loss  of  goods  in  course  of  carriage :  Disablement  of 

carrying  vessel. 

§  121.  (d)  Loss  of  vessel  in  course  of  seaman's  service. 

§  122.  (e)  Illness  or  death  of  contractor. 

§  123.  Same  :  Limitation  of  rule. 

§  124.  (/)  Act  of  government. 

§  125.         (3)   Measure  of  recovery. 

§  126.  Same  :  In  case  of  insurance  contracts. 

§  127.     (II)  Defendant's  performance  prevented :   In  general. 

§  128.         (1)  Recovery  of  prepaid  purchase  price  of  goods  or  land. 

§  129.         (2)  Recovery  of  prepaid  freight. 

§  130.  (3)  Enforcement  of  restitution  impracticable  :  Part  payment 
of  unapportionable  consideration. 

§  131.  (4)  Enforcement  of  restitution  inequitable :  Change  of  posi- 
tion. 

§  109.  In  general.  —  Strictly  speaking,  a  contract  is  net  dis- 
charged by  reason  of  being  or  becoming  impossible  of  perform- 
ance. But  not  infrequently  a  contract  which  in  terms  is 
unconditional  is  in  substance  and  effect  subject  to  a  condition 
which  protects  the  contractor  against  a  contingency  which 

174 


Chap.  VII]  MISRELIANCE   ON   CONTRACT  [§  112 

makes  performance  impossible.1  In  other  words,  the  contract 
is  so  construed,  by  reading  an  implied  condition  into  it,  as  to 
excuse  the  contractor  from  his  obligation  under  the  particular 
circumstances  which  make  performance  impossible.  The  scope 
of  this  chapter  is  confined  to  cases  in  which  a  benefit  is  conferred 
in  reliance  upon  a  contract  the  failure  to  perform  which  is  so 
excused. 

§  110.  Non-enforceability  may  result  from  prevention:  (1)  of 
plaintiff's  performance,  or  (2)  of  defendant's  performance.  — 
The  cases  in  which  quasi  contractual  obligation  may  be  claimed 
to  result  from  the  impossibility  of  performing  a  contract 
obviously  fall  into  two  classes :  —  first,  those  in  which  the 
plaintiff  is  prevented  from  completing  the  performance  of  a 
condition  precedent  to  the  defendant's  contractual  liability 
and  therefore  cannot  recover  in  a  contractual  action;  and 
second,  those  in  which  the  defendant  is  prevented  from  per- 
forming, but  because  of  an  implied  or  constructive  condition 
excusing  his  default,  cannot  be  held  for  a  breach.  The  two 
classes  of  cases  will  be  separately  considered. 

§  111.  (I)  Plaintiff's  performance  prevented :  In  general. — 
While,  as  has  been  explained,  the  cases  falling  within  the  scope 
of  this  chapter  are  those  in  which  the  default  does  not  constitute 
a  breach,  nevertheless,  a  failure  to  perform  a  condition  effectu- 
ally bars  a  recovery  on  the  contract.  If,  however,  the  plaintiff 
in  misreliance  upon  the  contract  has  by  part  performance 
conferred  a  benefit  upon  the  defendant,  he  is  entitled  to  resti- 
tution. 

§  112.  (1)  Misreliance  on  contract:  Assumption  of  risk. — 
The  English  courts,  in  the  cases  now  under  consideration,  as 
in  the  cases  where  one  who  has  committed  a  breach  of  contract 
seeks  to  recover  the  value  of  part  performance  (post,  §  164), 

1  The  phrase  "impossibility  of  performance,"  as  commonly  used, 
includes  some  cases  in  which  performance  is  not  physically  impossible, 
but  is  excused  because  of  unanticipated  danger  to  the  contractor, 
governmental  prohibition,  or  other  extraordinary  after-event  which 
would  make  the  enforcement  of  the  contract  unfair.  See  post,  §§  122, 
124. 

175 


§  112]        MISRELIANCE   ON   UNENFORCEABLE   CONTRACT      [Part  I 

refuse  to  recognize  a  quasi  contractual  obligation.1  The 
precise  reason  for  this  attitude  is  nowhere  satisfactorily  ex- 
pressed ;  but  it  seems  to  be  that  if  a  quasi  contractual  obliga- 
tion were  recognized,  the  plaintiff  would  be  allowed  to  recover 
compensation  for  his  part  performance  in  the  face  of  his  own 
agreement  that  for  part  performance  he  should  receive  nothing.2 
In  other  words,  the  plaintiff  is  thought  to  have  voluntarily 
assumed  the  risk  of  failure,  for  any  reason,  to  perform  in  full. 
And  a  voluntary  assumption  of  risk,  as  heretofore  explained 
(ante,  §  16),  is  incompatible  with  misreliance. 

Where  the  contract  contains  an  express  stipulation  that  in 
case  of  the  failure  of  the  plaintiff  to  perform  it  in  full  he  shall 
be  entitled  to  no  compensation  whatever,  the  view  that  he  assumed 
the  risk  appears,  with  a  limitation  hereafter  to  be  stated  (post 
§  114),  to  be  sound.  But  to  presume,  in  the  absence  of  such  an 
express  stipulation,  that  the  plaintiff  assumed  the  risk  of  an 
event  so  extraordinary  that  it  excuses  him  from  liability  for 
failure  to  perform  his  engagement,  seems  illogical  and  unjust. 
The  fair  presumption,  in  such  a  case,  it  is  submitted,  is  that  the 
risk  of  a  default  resulting  from  impossibility  was  not  assumed  and 
that  the  plaintiff  relied  upon  a  contract  right  which,  because  of 
his  excusable  default,  became  unavailable. 

§  113.  Same  :  Presumption  rebuttable.  —  If  the  presumption 
is  indulged  that  the  risk  of  default  resulting  from  impossibility 
is  not  assumed  by  the  plaintiff,  it  should  be  rebuttable  by  proof 

1  Appleby  v.  Dods,  1807,  8  East  300,  (services  of  seamen  on  vessel 
lost) ;  Appleby  v.  Myers,  1867,  L.  R.  2  C.  P.  651,  (work  on  premises 
destroyed  by  fire) ;  Anglo-Egyptian  Navigation  Co.  v.  Rennie,   1875, 
L.  R.  10  C.  P.  271,   (repairs  on  vessel  lost  before  completion) ;  The  Ma- 
dras [1898],  P.  90,  (towing  of  vessel  before  she  stranded) ;  King  v.  Low, 
1902,  3  Ont.  L.  R.  234,  (work  on  dwelling  destroyed  by  fire). 

2  Professor  Keener,  in  his  treatise  on  "  Quasi-Contracts,"  expresses 
it  as  follows  (p.  222) :   "It  would  seem  to  be  a  clear  usurpation  on  the 
part  of  a  court  to  say  that  a  plaintiff  shall  recover  compensation  from 
a  defendant  in  circumstances  in  which  both  the  plaintiff  and  the  defend- 
ant have  agreed  that  the  plaintiff  should  have  no  compensation,  and 
yet,  if  a  plaintiff  who  has  failed  to  perform  a  true  condition  in  the  con- 
tract is  allowed  to  exact  compensation  from  the  defendant  in  quasi- 
contract,  when  the  failure  would  prevent  his  recovering  on  the  contract 
itself,  a  court  is  practicing  such  usurpation.'' 

176 


Chap.  VII]  MISRELIANCE   ON   CONTRACT  [§  113 

that  the  purpose  of  the  condition  precedent  requiring  complete 
performance  before  payment  included  the  protection  of  the 
defendant  against  any  liability  whatever  in  case  of  im- 
possibility of  performance  by  the  plaintiff.  This  was  true 
in  the  much  discussed  English  case  of  Cutter  v.  Powell,  although 
under  the  English  doctrine  the  plaintiff  would  not,  in  any  event, 
have  been  permitted  to  recover : 

Cutter,  Admx.  of  Cutter  v.  Powell,  1795,  6  Term  R.  320: 
Assumpsit  for  work  and  labor  of  intestate  as  second  mate  of 
a  vessel  on  a  voyage  from  Kingston  to  Liverpool.  The  de- 
fendant engaged  in  writing  "to  pay  to  Mr.  T.  Cutter  the  sum 
of  thirty  guineas,  provided  he  proceeds,  continues,  and  does 
his  duty  as  second  mate  in  the  said  ship  from  hence  to  the  port 
of  Liverpool."  Cutter  died  during  the  voyage.  It  appeared 
that  the  usual  wages  of  a  second  mate  on  such  a  voyage,  when 
shipped  by  the  month  out  and  home,  were  four  pounds  per 
month. 

Lord  KENYON,  C.J.  (p.  324):  "...  here  the  defendant 
contracted  to  pay  thirty  guineas  provided  the  mate  continued 
to  do  his  duty  as  mate  during  the  whole  voyage,  in  which  case 
the  latter  would  have  received  nearly  four  times  as  much  as 
if  he  were  paid  for  the  number  of  months  he  served.  He 
stipulated  to  receive  the  larger  sum  if  the  whole  duty  were 
performed  and  nothing  unless  the  whole  of  that  duty  were 
performed ;  it  was  a  kind  of  insurance." 

GROSE,  J.  (p.  326) :  "And  when  we  recollect  how  large  a 
price  was  to  be  given  in  the  event  of  the  mate  continuing  on 
board  during  the  whole  voyage  instead  of  the  small  sum  which  is 
usually  given  per  month,  it  may  fairly  be  considered  that  the 
parties  themselves  understood  that  if  the  whole  duty  were 
performed,  the  mate  was  to  receive  the  whole  sum,  and  that  he 
was  not  to  receive  anything  unless  he  did  continue  on  board 
during  the  whole  voyage.  That  seems  to  me  to  be  the  situation 
in  which  the  mate  chose  to  put  himself ;  and  as  the  condition 
was 'not  complied  with,  his  representative  cannot  now  recover 
anything." 

It  is  clear  that  Cutter's  failure  to  complete  the  voyage  would 
not  have  been  held  a  breach,  for  assuming  that  he  promised  to 

177 


§  114]       MISRELIANCE  ON  UNENFORCEABLE  CONTRACT      [Part  I 

complete  it  the  promise  would  have  been  construed  to  contain 
an  implied  exception  excusing  his  estate  from  liability  in  case 
of  his  death.  But  since  the  extraordinary  wages  agreed  to  be 
paid  by  the  defendant  satisfied  the  court  that  the  parties  in- 
tended that  the  plaintiff  should  receive  nothing  in  case  of  failure 
from  any  cause,  it  was  properly  held  that,  in  respect  of  com- 
pensation for  his  services,  the  plaintiff  assumed  the  risk  of 
default  resulting  from  impossibility,  and  therefore  could  not 
fairly  seek  compensation  for  his  part  performance. 

§114.  Same:  Effect  of  express  stipulation. — Where  the 
contract  contains  an  express  stipulation  to  the  effect  that  in 
case  of  the  failure  of  the  plaintiff  to  complete  performance  he 
shall  be  entitled  to  no  compensation  whatever,  it  seems  fair  to 
presume  that  the  risk  of  failure  from  any  cause  was  assumed  by 
the  plaintiff.  Even  in  such  a  case,  however,  it  would  seem  that 
he  ought  to  be  permitted  to  overcome  the  presumption  and 
recover  the  value  of  his  part  performance  by  showing,  not 
merely  that  his  default  was  due  to  impossibility,  but  that  the 
contingency  which  made  performance  impossible  was  one  against 
which  the  stipulation  was  not  intended  to  protect  the  defendant. 

The  case  of  Appleby  v.  Dods  1  illustrates  the  point.  This  was 
an  action  by  a  seaman  to  recover  pro  rota  wages,  the  homeward 
voyage  not  having  been  completed  because  the  vessel  was  lost  at 
sea,  and  Lord  ELLENBOROUGH,  in  the  course  of  his  opinion,  said  :2 

"The  terms  of  the  contract  in  question  are  quite  clear  and 
reasonable :  they  relate  to  a  voyage  out  to  Madeira  and  any  of 
the  West  India  islands,  and  to  return  to  London ;  and  there  is 
an  express  stipulation  'that  no  seaman  shall  demand  or  be 
entitled  to  his  wages,  or  any  part  thereof,  until  the  arrival  of 
the  ship  at  the  above  mentioned  port  of  discharge/  etc. ;  which 
must  refer  to  London.  And  though  the  reason  of  this  stipulation 
was,  no  doubt,  to  oblige  the  mariners  to  return  home  with  the 
ship,  and  not  to  desert  her  in  the  West  Indies ;  yet  the  terms  of 
it  are  general,  and  include  the  present  case :  and  we  cannot  say, 
against  the  express  contract  of  the  parties,  that  the  seaman 

1  1807,  8  East  300. 
1  At  page  303. 

178 


Chap.  VII]  DESTRUCTION   OF   BUILDING  [§  116 

shall  recover  pro  rata,  although  the  ship  never  did  reach  her 
port  of  discharge  named." 

Now,  had  it  been  proved,  instead  of  assumed,  that  the  sole 
purpose  of  the  express  stipulation  quoted  was  to  protect  the 
defendant  against  desertion,  the  court  would  have  been  obliged, 
upon  principle,  to  hold  that  the  plaintiff  had  not  assumed  the 
risk  of  impossibility  resulting  from  the  loss  of  the  ship,  and  con- 
sequently was  entitled  to  the  value  of  his  part  performance.1 

§  115.  (2)  Receipt  of  benefit  by  defendant. — The  element 
of  quasi  contractual  obligation  most  frequently  declared  to 
be  wanting  in  the  class  of  cases  under  consideration  in  this 
chapter,  is  that  of  the  receipt  of  a  benefit  by  the  defendant 
as  a  result  of  the  plaintiff's  part  performance.  For  the  sake 
of  clearness  several  groups  of  cases  in  which  this  question  has 
been  raised  will  be  considered  separately. 

§116.  (a)  Destruction  of  building  in  course  of  improvement. — 
It  has  been  held  in  a  number  of  cases  that  one  who  is  prevented 
from  completing  the  performance  of  a  contract  to  alter,  decorate, 
repair,  or  contribute  to  the  construction  of  a  building,  by  the 
destruction  of  the  building,  cannot  recover  for  the  labor  and 
materials  expended  in  part  performance.2  Doubtless  one 

1  See  Keener,  "Quasi-Contracts,"  p.  250,  in  which  it  is  forcefully 
argued  that  the  introduction  of  evidence  to  show  that  a  condition  in- 
serted in  a  contract  was  inserted  to  meet  a  contingency  which  has  not 
arisen  is  not  a  violation  of  the  so-called  parol  evidence  rule.    "Whether 
this  evidence  should  be  allowed  or  not,"  says  Professor  Keener,  "would 
seem  to  depend  upon  the  purpose  for  which  it  is  offered.     If  it  is  offered 
for  the  purpose  of  varying  the  terms  of  a  contract,  and  to  enable  the  per- 
son to  recover  on  the  contract  itself,  the  evidence  should  not  be  admitted, 
for  the  reason  that  it  would  convert  what  is  in  form  a  conditional  promise 
into  an  absolute  promise.  But  when  the  plaintiff  concedes  that  the  promise 
is  a  conditional  promise,  and  that  therefore  he  cannot  recover  upon  that 
promise,  and  offers  the  evidence,  not  for  the  purpose  of  claiming  rights 
under  the  contract,  but  for  the  purpose  of  showing  that  a  recovery  by 
him  would  not  violate  any  intention  that  existed  in  the  mind  of  either 
himself  or  the  defendant  at  the  time  when  the  contract  was  made,  such 
evidence  it  is  submitted  is  not  open  to  the  objection  of  varying  a  written 
instrument  by  parol  evidence." 

2  Appleby  v.  Myers,  1867,  L.  R.  2  C.  P.  651 ;  Siegel,  Cooper  &  Co.  v. 
Eaton  &  Prince  Co.,  1897,  165  111.  550;   46    N.  E.  449;   Huyett  Mfg. 
Co.  v.  Chicago  Edison  Co.,  1897,  167  111.  233 ;  47  N.  E.  384 ;  59  Am.  St. 

179 


§  116]        MISRELIANCE  ON  UNENFORCEABLE  CONTRACT      [Part  I 

of  the  reasons  for  so  holding  —  not  always  made  clear  in  the 
cases  —  is  the  notion  that  the  destruction  of  the  building  before 
complete  performance  prevents  the  defendant  from  reaping 
any  benefit  from  part  performance.  The  weight  of  American 
authority,  however,  permits  a  recovery,1  though  in  some  of  the 
cases  upon  the  theory  of  a  genuine  implied  agreement  by  the 
owner  of  the  building  to  pay  pro  rata  for  the  actual  performance 
of  the  work  in  case  the  building  is  destroyed.  The  quasi 
contractual  basis  of  recovery  is  well  expressed  in  the  following 
decisions : 

Young  v.  City  of  Chicopee,  1904, 186  Mass.  518 ;  72  N.  E.  63  : 
Action  to  recover  for  work  and  materials  furnished  under  a 
contract  for  the  repair  of  a  bridge.  During  the  progress  of 
the  work,  the  bridge  was  totally  destroyed.  The  only  question 

Rep.  272;  Krause  v.  Board  of  Trustees,  1904,  162  Ind.  278;  70 
N.  E.  264 ;  65  L.  R.  A.  Ill ;  102  Am.  St.  Rep.  203 ;  Taulbee  v.  McCarty, 
1911, 144  Ky.  199  ;  137  S.  W.  1045  ;  King  v.  Low,  1902,  3  Ont.  L.  R.  234. 
And  see  Brumby  v.  Smith,  1841,  3  Ala.  123  ;  Clark  v.  Collier,  1893,  100 
Cal.  256 ;  34  Pac.  677 ;  Louisville  Foundry,  etc.,  Co.  v.  Patterson,  1906, 
29  Ky.  Law  Rep.  349 ;  93  S.  W.  22 ;  Fairbanks  v.  Richardson  Drug 
Co.,  1890, 42  Mo.  App.  262 ;  Pike  Electric  Co. ».  Richardson  Drug  Co., 
1890,  42  Mo.  App.  272. 

1  Cleary  v.  Sohier,  1876,  120  Mass.  210;  Butterfield  v.  Byron,  1891, 
153  Mass.  517  ;  27  N.  E.  667 ;  12  L.  R.  A.  571 ;  25  Am.  St.  Rep.  654 ; 
Young  v.  City  of  Chicopee,  1904,  186  Mass.  518 ;  72  N.  E.  63 ;  Angus 
v.  Scully,  1900,  176  Mass.  357  ;  57  N.  E.  674 ;  49  L.  R.  A.  562  ;  79  Am. 
St.  Rep.  318;  Ganong  &  Chenoweth  v.  Brown,  1906,  88  Miss.  53; 
40  So.  556 ;  117  Am.  St.  Rep.  731 ;  Haynes,  Spencer  and  Co.  v.  Second 
Baptist  Church,  1882,  12  Mo.  App.  536,  (aff.  1885,  88  Mo.  285 ;  57 
Am.  Rep.  413 ;  but  see  Fairbanks  v.  Richardson  Drug  Co.,  1890,  42 
Mo.  App.  262;  Pike  Electric  Co.  ».  Richardson  Drug  Co.,  1890,  42 
Mo.  App.  272) ;  Dame  ».  Woods,  1908,  75  N.  H.  38 ;  70  Atl.  1081,  (cf. 
same  v.  same,  1905,  73  N.  H.  222 ;  60  Atl.  744 ;  70  L.  R.  A.  133) ; 
Niblo  v.  Binsse,  1864,  3  Abb .  App.  Dec.  (N.  Y.)  375 ;  Hayes  v.  Gross, 
1896,  9  App.  Div.  12 ;  40  N.  Y.  Supp.  1098,  (aff.  1900,  162  N.  Y. 
610;  57  N.  E.  1112);  Hollis  v.  Chapman,  1871-72,  36  Tex.  1;  Weis 
v.  Delvin,  1887,  67  Tex.  507 ;  3  S.  W.  726 ;  60  Am.  Rep.  38 ;  Clark  v. 
Franklin,  1836,  7  Leigh  (Va.)  1 ;  Hysell  v.  Sterling  Coal  Co.,  1899,  46 
W.  Va.  158;  33  S.  E.  95;  Cook  v.  McCabe,  1881,  53  Wis.  250;  10  N. 
W.  507 ;  40  Am.  Rep.  765 ;  Halsey  v.  Waukesha  Springs  Sanitarium, 
1905,  125  Wis.  311 ;  104  N.  W.  94;  110  Am.  St.  Rep.  838.  And  see 
Schwartz  v.  Saunders,  1867,  46  111.  18 ;  Rawson  v.  Clark,  1873,  70  111. 
656  ;  Clark  v,  Busse,  1876,  82  111.  515  ;  Teakle  v.  Moore,  1902,  131  Mich. 
427 ;  91  N.  W.  636 ;  Ellis  v.  Midland  R.  Co.,  1881,  7  Ont.  App.  464. 

180 


Chap.  VII]  DESTRUCTION   OF   BUILDING  [§  116 

was  whether  the  defendant  was  liable  for  the  loss  of  lumber 
which  the  plaintiff  had  distributed  along  the  bridge  and  the 
river  banks  but  which  at  the  time  of  the  fire  had  not  actually 
been  used  in  making  repairs.  HAMMOND,  J.  (p.  520) :  "  In 
whatever  way  the  principle  may  be  stated,  it  would  seem  that 
the  liability  of  the  owner  is  a  case  like  this  should  be  measured 
by  the  amount  of  the  contract  work  done  which,  at  the  time  of 
the  destruction  of  the  structure,  had  become  so  far  identified 
with  it  as  that  but  for  the  destruction  it  would  have  inured  to 
him  as  contemplated  by  the  contract.  In  the  present  case  the 
defendant,  in  accordance  with  this  doctrine,  should  be  held 
liable  for  the  labor  and  materials  actually  wrought  into  the 
bridge." 

Hayes  v.  Gross,  1896,  9  App.  Div.  12 ;  40  N.  Y.  Supp.  1098 ; 
affirmed  without  opinion,  1900,  162  N.  Y.  610;  57  N.  E.  1112 : 
Action  to  recover  for  labor  performed  and  materials  furnished 
by  plaintiff  under  a  contract  for  carpenter  work  on  a  hotel 
building,  which  in  the  course  of  plaintiff's  performance  was 
destroyed  by  fire.  LANDON,  J.  (p.  13) :  "When  a  builder  agrees 
to  erect  and  complete  an  entire  house,  if  the  house  is  destroyed 
by  fire  before  completion,  the  builder  can  erect  another ;  and, 
if  he  does  not  do  so,  he  is  guilty  of  a  breach  of  his  contract. 
But  if  a  painter  agrees  to  paint  a  certain  house,  and  the  house 
is  destroyed  before  the  painting  is  finished,  it  is  impossible  for 
him  to  complete  his  contract.  If  a  new  house  should  be  erected, 
it  would  not  be  the  house  he  had  agreed  to  paint.  Why  should 
not  the  painter  be  paid  for  his  part  performance  ?  It  was  no 
fault  of  his  that  full  performance  was  impossible.  But  why 
should  the  owner  pay  ?  Because  every  stroke  of  the  painter's 
brush  converted  something  of  the  painter's  labor  and  material 
into  the  property  of  the  owner  and  thus  the  fire  destroyed  the 
owner's  property,  and  not  the  painter's.  If  the  painter  had 
been  painting  a  boat  which  he  had  agreed  to  make  and  deliver 
to  the  vendee,  and  fire  had  destroyed  it  before  delivery,  the 
whole  loss  would  have  been  his,  and  not  the  vendee's,  since  title 
would  not  pass  until  delivery." 

In  the  Massachusetts  case  of  Lord  v.  Wheeler1  the  court, 
in  allowing  a  recovery,  said : 

1  1854,  1  Gray  (Mass.)  282,  283. 
181 


§  117]      MISRELIANCE   ON   UNENFORCEABLE   CONTRACT      [Part   I 

"The  precise  ground  on  which  the  plaintiff  can  recover  in 
this  case  is,  that,  when  the  repairs  upon  the  house  were  sub- 
stantially done,  and  before  the  fire,  the  defendant  by  his  tenant 
entered  into  and  occupied  it,  and  so  used  and  enjoyed  the  labor 
and  materials  of  the  plaintiff ;  and  that  such  use  and  enjoyment 
were  a  severance  of  the  contract,  and  an  occupation  pro  tanto 
by  the  defendant."  1 

This  does  not  make  it  entirely  clear  whether  the  defendant 
is  held  liable  in  contract  because  of  the  severance,  by  occupa- 
tion, of  that  part  of  the  contract  which  was  performed  from 
that  which  was  not,  or  in  quasi  contract  because  of  the  enjoy- 
ment, by  use  and  occupation,  of  the  improved  property.  As 
to  contractual  liability  it  would  seem  difficult  to  regard  the 
mere  occupation  of  one's  own  house  while  it  is  undergoing  repairs 
as  a  severance  of  the  contract  to  make  the  repairs.  "  It  would 
seem  that  a  defendant,  so  long  as  he  does  no  act  to  interfere 
with  the  performance  by  a  plaintiff  of  his  contract,  and  is  not 
under  a  contract  to  surrender  exclusive  possession  of  his  prop- 
erty while  repairs  are  being  made,  should  be  allowed,  if  he 
is  willing  to  undergo  the  inconvenience  consequent  upon  living 
in  a  house  which  is  being  repaired,  to  live  therein  without  being 
held  to  waive  the  conditions  of  the  contract."  2  On  the  other 
hand,  if  the  court,  by  declaring  the  defendant  liable  upon  the 
"  precise  ground  "  that  by  entering  into  the  occupation  of  the 
building  he  reaped  a  benefit  from  the  plaintiff's  performance,  in- 
tended to  indicate  that  without  proof  of  such  occupation  there 
could  have  been  no  recovery,  its  view  was  contrary  to  the 
settled  doctrine  of  Massachusetts.3 

§117.  Same:  Upon  principle. — The  cases  denying  a  re- 
covery have  the  support  of  Professor  Keener.  Referring  to  one 

1  Cf.  Louisville  Foundry,  etc.,  Co.  v.  Patterson,  1906,  29  Ky.  Law 
Rep.  349 ;  93  S.  W.  22,  23. 

2  Keener,    "Quasi-Contracts,"    p.  256.     And   see   Munro  v.  Butt, 
1858,  8  El.  &  Bl.  738,  753 ;    Forman  &  Co.,  Proprietary  v.  The  Ship 
"Liddesdale,"  [1900]  A.  C.  190,  204;  Hanley  v.  Walker,  1890,  79  Mich. 
607,  619 ;  45  N.  W.  57 ;  8.  L.  R.  A.  207. 

J  See  cases  cited  in  note  1,  page  180. 

182 


Chap.  VII]  DESTRUCTION   OF   BUILDING  [§  117 

of  the  decisions  in  which  relief  was  granted,  Cleary  v.  Sohier,1 
he  says : 2  "As  the  plaintiff  had  not  completed  his  contract, 
and  as  the  defendant  was  deriving  no  benefit  from  the  work 
done  by  the  plaintiff,  the  house  being  in  the  course  of  erection, 
it  seems  impossible  to  support  the  decision  except  on  the  theory 
of  the  New  York  decisions,  —  namely,  that  in  such  a  case  the 
defendant  in  fact  agrees  to  keep  the  building  in  existence." 
And  again : 3  "  The  ground  therefore  upon  which  the  court 
decided  in  favor  of  the  plaintiff  in  Lord  v.  Wheeler  cannot  be 
used  to  support  the  decision  of  the  court  in  Cleary  v.  Sohier, 
since  the  defendant  had  not  enjoyed  the  work  done  by  the  plain- 
tiff by  using  and  occupying  the  premises." 

It  is  respectfully  submitted  that  the  doctrine  of  no  recovery, 
approved  by  Professor  Keener,  is  unsound.  It  appears  to  rest 
solely  upon  the  hypothesis  that  the  only  profit  derivable  from 
a  building  is  that  which  results  from  use  and  occupation.  If 
such  were  the  fact,  it  would  follow  that  evidence  of  the  complete 
performance  of  a  contract  for  the  repair  or  improvement  of  a 
building,  without  evidence  of  use  and  occupation  thereof,  would 
be  insufficient  to  support  a  quasi  contractual  action.  Yet  in 
the  cases  of  improvements  made  under  contracts  unenforceable 
because  of  the  Statute  of  Frauds,  or  upon  the  property  of  an- 
other by  mistake,  neither  use  and  occupation  by  the  defendant 
nor  completion  of  the  contemplated  improvement  by  the  plain- 
tiff appears  to  be  regarded  as  essential.  As  a  matter  of  fact  it 
cannot  be  questioned  that  an  incomplete  and  unoccupied  im- 
provement may  be  a  benefit  to  the  owner  of  the  property. 
When  such  incomplete  improvement  actually  enhances  the  mar- 
ket value  of  the  property  the  benefit  is  obvious.  But  when  the 
improvement  is  entered  upon  at  the  instance  of  the  owner  of  the 
property,  such  enhancement  of  value  is  not  essential  to  the 
derivation  of  a  benefit,  for  even  completion  of  the  improvement 
might  not  result  in  an  enhancement  of  value.  In  such  a  case, 
every  unit  or  particle  of  material  which,  in  accordance  with  the 

1  1876,  120  Mass.  210. 

2  Keener,  "Quasi-Contracts,"  p.  254. 
*  Keener,  "Quasi-Contracts,''  p.  255. 

183 


§  118]        MISRELIANCE  ON  UNENFORCEABLE  CONTRACT      [Part  I 

defendant's  wish,  is  irrevocably  appropriated  to  the  improve- 
ment of  the  defendant's  property,  and  every  stroke  of  labor 
performed  upon  such  material  or  upon  the  property  improved, 
constitutes  a  benefit  to  the  defendant,  and  the  failure  of  the 
defendant  to  use  or  occupy  such  improvement  —  to  enter  into 
the  "enjoyment"  of  it, — clearly  cannot  affect  the  right  of 
recovery. 

It  is  not  improbable  that  in  the  cases  denying  a  recovery  the 
courts  were  influenced  by  the  fact  that  the  very  event  which  in 
these  cases  makes  performance  impossible  —  the  destruction  of 
the  building —  also  puts  an  end  to  the  defendant's  enjoyment  of 
or  profit  from  the  plaintiff's  part  performance.  This  gives  a 
recovery  for  such  part  performance  the  appearance  of  hardship. 
But  it  must  be  remembered  that  the  plaintiff  is  equally  innocent 
with  the  defendant  and  that  a  hardship  to  one  or  the  other  is 
inevitable.  Moreover,  the  defendant  may  and  usually  does 
insure  his  building,  and  is  thereby  indemnified,  while  the  plain- 
tiff cannot  insure  labor,  nor  materials  which  have  become  the 
defendant's  property. 

§118.  Same:  Doctrine  of  Niblo  v.  Binsse.  —  In  the  New 
York  case  of  Niblo  v.  Binsse,1  which  has  had  some  following 
elsewhere,  a  recovery  for  services  rendered  and  materials  used 
in  setting  up  a  steam  engine  and  heating  apparatus  was  allowed 
upon  the  peculiar  ground  that  the  owner  of  the  building,  for 
whom  the  work  was  being  done,  impliedly  undertook  to  keep 
the  building  in  existence  until  the  work  was  completed.  Said 
the  court : 

"No  principle  of  law  is  better  settled  than  this,  that  when 
one  party  has,  by  his  own  act  or  default,  prevented  the  other 
party  from  fully  performing  his  contract,  the  party  thus  prevent- 
ing performance  cannot  take  advantage  of  his  own  act  or  de- 
fault, and  screen  himself  from  payment  for  what  has  been  done 
under  the  contract.  The  law  will  imply  a  promise  on  his  part 
to  remunerate  the  other  party  for  what  has  been  done  and  sup- 
port an  action  upon  such  implied  promise. 

1 1864,  3  Abb.  App.  Dec.  (N.  Y.)  375,  378. 
184 


Chap.  VII]  DESTRUCTION   OF   BUILDING  [§  118 

"This  case  falls  exactly  within  this  principle  of  law.  .  .  . 
If  one  party  agrees  with  another  to  do  work  upon  a  house,  or 
other  building,  the  law  implies  that  the  employer  is  to  have  the 
building  in  existence  upon  which  the  work  contracted  for  may 
be  done.  It  is  necessarily  a  part  of  the  contract  on  the  part 
of  such  employer,  whether  it  is  specified  in  it  in  terms  or  not. 
Here  the  defendant's  testator  failed  to  provide  and  keep  the 
building  till  the  work  could  be  completed,  and  thus, — and  thus 
only,  —  was  performance  prevented."  l 

If  it  be  conceded  that  the  owner  of  a  building  impliedly  under- 
takes to  keep  it  in  existence  during  the  performance  of  a  contract 
for  work  upon  it,  the  plaintiff  in  such  cases  as  Niblo  v.  Binsse 
clearly  has  a  right  of  action  for  breach  of  contract.  His  recovery 
on  the  common  counts  properly  rests,  therefore,  not  upon  the 

1  Accord :  Rawson  v.  Clark,  1873,  70  111.  656,  658,  (Action  to  recover 
value  of  labor  and  materials  furnished  under  a  contract  to  manufacture 
and  place  in  a  building  certain  ironwork.  After  all  the  ironwork  had 
been  manufactured  but  before  any  of  it  had  been  set  up,  the  building 
was  wholly  destroyed  by  fire.  SHELDON,  J. :  "The  reason  of  their 
not  entirely  completing  their  contract  by  placing  the  ironwork  in  the 
building,  was,  the  default  of  the  defendant  in  not  having  a  building  pro- 
vided for  the  purpose.") ;  Haynes,  Spencer  &  Co.  v.  Second  Baptist 
Church,  1882, 12  Mo.  App.  536,  545  ;  aff.  1885, 88  Mo.  285 ;  57  Am.  Rep. 
413,  (Action  to  recover  value  of  certain  pews  and  other  woodwork  and 
labor  and  materials  furnished  under  a  contract  by  which  the  plaintiff 
agreed  to  "  make,  finish  and  put  up  complete,  furnishing  all  labor  and 
materials,  the  pews  in  the  audience  room  and  in  the  gallery,  the  pul- 
pit and  the  screen  over  the  pulpit  and  baptistry,  and  the  organ  front " 
for  $4800  to  be  paid  on  completion  and  acceptance  of  the  work.  Dur- 
ing the  plaintiff's  performance  the  building  caught  fire  from  some  unex- 
plained accident  and  was  destroyed.  BAKEWELL  J. :  "Where  the  owner 
of  the  property  retains  possession  and  contracts  for  work  to  be  done 
upon  it  while  in  his  custody,  there  is,  we  think,  an  implied  obligation 
resting  upon  him  to  have  it  in  readiness  for  the  work  to  be  performed 
upon  it,  and  the  plaintiff  was  not  bound  to  provide  in  the  contract  for 
the  default  of  the  other  party  in  the  matter  of  this  obligation.  So  far 
as  regards  an  impossibility  arising  from  the  act  of  God,  neither  party  need 
provide  against  that  in  his  contract ;  but  from  an  impossibility  arising 
from  human  agency,  and  an  accidental  fire  making  it  impossible  to 
finish  the  building  in  time  to  receive  the  woodwork,  it  would  seem  that 
the  owner  and  occupier  of  the  building,  rather  than  one  having  access 
to  it  as  one  of  many  contractors  employed  in  its  repair  or  construction, 
should  provide.")  See  also  Rhodes  v.  Hinds,  1903,  79  App.  Div.  379; 
79  N.  Y.  Supp.  437,  439. 

185 


§119]      MISRELIANCE   ON   UNENFORCEABLE   CONTRACT      [Parti 

right  to  recover  in  quasi  contract  where  a  contract  is  unenforce- 
able because  of  impossibility  of  performance,  but  upon  the  right 
to  elect  between  the  alternative  remedies  of  compensation  and 
restitution  in  the  case  of  breach  by  the  defendant  (post,  §  260 
et  seq.). 

In  the  more  recent  New  York  case  of  Hays  v.  Gross,1  the  Ap- 
pellate Division  of  the  Supreme  Court  ventured  to  reject  the 
reasoning  of  Niblo  v.  Binsse.  Said  LANDON,  J. : 

"We  think  Niblo  v.  Binsse,  upon  which  the  learned  referee 
relied,  was  correctly  decided,  but,  with  due  respect,  we  submit 
that  the  decision  was  placed  upon  untenable  ground.  The 
court  said  that  it  placed  its  decision  upon  the  ground  that  the 
contractor  was  prevented  from  performing  his  contract  by  the 
default  of  the  owner  in  failing  to  keep  on  hand  and  in  readiness 
the  building  in  which  the  work  was  to  be  done,  and  was  in 
default  whether  the  building  was  destroyed  with  or  without 
fault  on  his  part.  The  case  shows  that  the  building  was  de- 
stroyed without  fault  of  either  owner  or  contractor.  If  the 
defendant  was  without  fault  in  the  destruction  of  the  building, 
it  is  difficult  to  see  how  he  was  in  default  for  not  keeping  it  on 
hand.  In  the  Niblo  Case,  as  in  the  one  under  review,  we  think 
the  destruction  of  the  building  prevented  and  excused  the 
defendant  from  keeping  it  on  hand,  and  that  neither  party 
could  recover  damages  of  the  other  upon  account  of  the  breach 
of  the  contract  thereby  caused.  Authorities  in  other  states, 
while  denying  the  right  of  either  party  to  the  contract  to  recover 
of  the  other  damages  of  [for]  a  breach  of  the  contract  when 
performance  is  defeated  by  the  destruction  of  the  building  .  .  . 
affirm  the  right  of  the  contractor  to  recover  for  what  he  has  done 
and  furnished  up  to  the  time  of  its  destruction." 

§  119.  (6)  Destruction  of  personalty  in  course  of  alteration  or 
repair.  —  The  case  of  the  destruction  of  goods  or  chattels  in  the 
course  of  alteration  or  repair,  without  the  fault  of  the  bailee,  is 
on  all  fours  with  that  of  the  destruction  of  a  building  during  the 
making  of  improvements  thereon.  The  labor  and  materials  be- 

1  1896,  9  App.  Div.  12,  16 ;  40  N.  Y.  Supp.  1098,  off.  1900,  162 
N.  Y.  610 ;  57  N.  E.  1112. 

186 


Chap.  VII]  DESTRUCTION    OF   GOODS  [§  119 

ing  expended  in  response  to  the  desire  of  the  owner  of  the  prop- 
erty and  being  incorporated  in  or  absorbed  by  the  property, 
constitute  a  benefit  to  such  owner,  whether  or  not  they  enhance 
the  value  of  the  goods.  And  neither  the  fact  that  the  full  bene- 
fit contemplated  by  the  contract  is  not  conferred,  nor  the  fact 
that  the  owner  is  deprived  of  the  "  enjoyment,"  by  use  or  sale, 
of  the  benefit,  should  be  permitted  to  defeat  a  recovery. 
This  view  appears  to  have  been  taken  by  Lord  MANSFIELD  : 

Menetone  v.  Aihawes,  1764,  3  Burr.  1592 :  Action  by  a 
shipwright  for  work  and  materials  in  repairing  defendant's 
ship.  The  ship  was  in  a  dock  hired  by  the  defendant  from  the 
plaintiff,  and  was  destroyed  by  fire  when  only  three  hours' 
work  was  wanting  to  complete  the  repairs. 

Mr.  Dunning,  for  the  defendant :  "The  question  is,  'Whether 
the  plaintiff  is  entitled  to  be  paid  by  the  defendant  for  that 
work  and  labor  from  which  the  defendant  neither  did  nor  could 
reap  any  advantage'  ..." 

Mr.  Murphy,  in  reply :  "  Suppose  a  horse  sent  to  a  farrier's 
to  be  cured,  is  burnt  in  the  stable  before  the  cure  is  completely 
effected :  shall  not  the  farrier  be  paid  for  what  he  has  already 
done?" 

Lord  MANSFIELD  (p.  1594) :  "This  is  a  desperate  case  for 
the  defendant  (though  compassionate) :  I  doubt  it  is  very 
difficult  for  him  to  maintain  his  point.  Besides  it  is  stated, 
'that  he  paid  51.  for  the  use  of  the  dock.'" 

Mr.  Justice  WILMOT:  "So  that  it  is  like  a  horse  that  a  far- 
rier was  curing  being  burnt  in  the  owner's  own  stable." 

As  heretofore  stated,  however  (ante,  §  112),  it  subsequently 
became  the  settled  doctrine  in  England  that  a  party  in  default, 
even  though  complete  performance  is  impossible,  cannot  re- 
cover the  benefit  resulting  from  part  performance.  And  Mene- 
tone v.  Aihawes  was  distinguished  as  a  case  in  which  the  agree- 
ment was  not  to  pay  for  the  entire  repairs  when  completed,  but 
for  such  work  as  the  shipwright  might  do  and  in  which,  there- 
fore, the  plaintiff's  recovery  was  upon  the  contract  itself : 

Appleby  v.  Myers,  1867,  L.  R.  2  C.  P.  651 :  Action  for  work 
and  materials  in  erecting  engine,  boiler,  and  certain  machinery 

187 


§  120]         MISRELIANCE  ON  UNENFORCEABLE  CONTRACT      [Part  I 

in  the  defendant's  property.  In  the  course  of  the  plaintiff's 
performance  of  his  contract,  the  defendant's  premises  were  de- 
stroyed by  fire.  BLACKBURN,  J.  (p.  659) :  "  It  is  quite  true  that 
materials  worked  by  one  into  the  property  of  another  become 
part  of  that  property.  This  is  equally  true,  whether  it  be  fixed 
or  movable  property.  Bricks  built  into  a  wall  become  part  of 
the  house ;  thread  stitched  into  a  coat  which  is  under  repair, 
or  planks  and  nails  and  pitch  worked  into  a  ship  under  repair, 
become  part  of  the  coat  or  the  ship ;  and  therefore,  generally, 
and  in  the  absence  of  something  to  shew  a  contrary  intention, 
the  bricklayer,  or  tailor,  or  shipwright,  is  to  be  paid  for  the  work 
and  materials  he  has  done  and  provided,  although  the  whole 
work  is  not  complete.  It  is  not  material  whether  in  such  a  case 
the  non-completion  is  because  the  shipwright  did  not  choose  to 
go  on  with  the  work,  as  was  the  case  in  Roberts  v.  Havelock,1  or 
because  in  consequence  of  a  fire  he  could  not  go  on  with  it,  as 
in  Menetone  v.  Athawes.  But,  though  this  is  the  prima  facie 
contract  between  those  who  enter  into  contracts  for  doing  work 
and  supplying  materials,  there  is  nothing  to  render  it  either 
illegal  or  absurd  in  the  workman  to  agree  to  complete  the  whole, 
and  be  paid  when  the  whole  is  complete,  and  not  till  then : 
and  we  think  that  the  plaintiffs  in  the  present  case  had  entered 
into  such  a  contract." 

In  America,  the  value  of  the  labor  and  materials  expended 
upon  the  property  may  be  recovered.2 

§  120.  (c)  Loss  of  goods  in  course  of  carriage  :  Disablement  of 
carrying  vessel.  —  There  appears  to  be  little  difference,  in  prin- 
ciple, between  the  case  of  the  destruction  of  goods,  without 
fault,  while  undergoing  repair,  discussed  in  the  preceding  section, 
and  that  of  the  loss  of  goods,  without  fault,  during  carriage.  It 
appears  to  be  the  law,  however,  that  the  carrier  can  recover 
nothing  for  the  carriage  of  goods  which  are  lost  in  course  of 
transportation  and  therefore  cannot  be  delivered  at  their  des- 
tination : 

1  1832,  3  Barn.  &  Ad.  404. 

2  Whelan  ».  Ansonia  Clock  Co.,  1884,  97  N.  Y.  293 ;    Labowitz  r. 
Frankfort,  1893,  4  Misc.  Rep.  275 ;  23  N.  Y.  Supp.  1038 ;   Rhodes  ». 
Hinds,  1903,  79  App.  Div.  379;    79  N.  Y.  Supp.  437.     See  Parsons, 
"Contracts"  (9th  ed.),  Vol.  II,  131. 

188 


Chap.  VII]        LOSS   OF   GOODS  DURING   CARRIAGE  [§  120 

British,  etc.,  Ins.  Co.  v.  Southern  Pacific  Co.,  1896,  72  Fed.  285 ; 
18  C.  C.  A.  561 ;  38  U.  S.  App.  243 :  Libel  to  recover  certain 
sums  withheld  as  pro  rata  freight  on  certain  cotton  which  was 
in  part  damaged  and  in  part  destroyed  while  in  possession  of 
the  carrier.  LACOMBE,  Circuit  Judge  (p.  287) :  "  From  the 
decree  of  the  district  court  the  respondent  also  appeals,  insisting 
that  the  carrier  should  be  allowed  to  reserve  from  the  proceeds 
of  the  damaged  cotton  pro  rata  freight  for  the  bales  which  were 
totally  destroyed,  and  which,  of  course,  were  never  accepted 
by  the  owner  at  the  intermediate  port,  and,  being  no  longer 
in  existence,  could  not  be  reconditioned  and  forwarded  as 
damaged  bales.  No  authority  is  cited  in  support  of  this  con- 
tention. Presumably  none  could  be  found,  for  it  is  elementary 
that,  except  in  those  cases  where  by  express  contract  the  freight 
is  stipulated  to  be  paid  in  advance,  delivery  at  the  port  of 
discharge  is  a  condition  precedent  to  the  shipowner's  right  to 
have  the  freight."  x 

In  the  case  of  the  disablement  of  the  carrying  vessel  and  a 
resulting  delivery  or  tender  of  the  goods  to  the  owner  at  some 
port  of  distress,  the  benefit  accruing  to  the  owner  from  the  car- 
rier's part  performance  may  be  more  obvious.  But  it  is 
settled  that  nothing  can  be  recovered  by  the  carrier  unless  the 
owner  voluntarily  waives  further  carriage  and  consents  to  ac- 
cept the  goods  at  the  port  of  distress,  in  which  case  a  genuine 
contract  to  pay  pro  rata  freight  is  implied.2  The  leading  case 
permitting  a  recovery  pro  rata  where  the  goods  are  delivered  at  a 
port  of  distress  is  Luke  v.  Lyde?  Lord  Chief  Justice  COCKBURN, 

1  Accord:    Gibson  v.  Sturge,  1885,  10  Exch.  622;    Dakin  v.  Oxley, 
1864,  15  C.  B.  N.  S.  646.     See  also  Mackrell  v.  Simond,  1776,  Abbott 
on  "Shipping"  (5th  ed.),  333;    (14th  ed.),  p.  743;    Scott's  "Cases  on 
Quasi-Contracts,"  p.  621 ;   Hutchinson,  "Carriers"  (3d  ed.),  §  800  and 
cases  cited. 

2  Luke  v.  Lyde,  1759,  2  Burr.  882 ;   1  W.  Bl.  190 ;   Liddard  ».  Lopes, 
1809,  10  East  526 ;  Hopper  v.  Burness,  1876,  1  C.  P.  D.  137 ;  Metcalfe 
v.  Brittania  Ironworks  Co.,  1876,  1  Q.  B.  D.  613;  Gaze  v.  Baltimore 
Ins.  Co.,  1813,  7  Cranch  (U.  S.)  358 ;   Hurtin  v.  Union  Ins.  Co.,  1806, 
1  Wash.  (U.  S.  C.  C.)  530 ;  Fed.  Gas.,  No.  6942 ;  Welch  v.  Hicks,  1826, 
6  Cow.  (N.  Y.)  504 ;  Callender  ».  Ins.  Co.  of  N.  A.,  1813,  5  Binney  (Pa.) 
525;   Richardson  v.  Young,  1861,  38  Pa.  St.  169.     For  additional  cita- 
tions, see  Hutchinson,  "Carriers"  (3d  ed.),  §  815. 

3  1759,  2  Burr.  882;   1  W.  Bl.  190. 

189 


§  121]        MISRELIANCE   ON  UNENFORCEABLE  CONTRACT      [Part  I 

in  his  dissenting  opinion  in  Metcalfe  v.  The  Brittania  Ironworks 
Company,1  insisted  that  Lord  MANSFIELD  based  his  decision  in 
Luke  v.  Lyde  "  not  upon  any  fiction  of  a  substituted  contract, 
.  .  .  but  upon  the  broad  principle  of  maritime  law,  that,  the 
voyage  having  been  interrupted  without  any  fault  of  the  ship- 
owner, the  merchant,  who  has  had  the  benefit  of  partial  convey- 
ance, if  he  takes  the  goods,  must  pay  freight  pro  rata,"  and 
therefore  that  the  consent  of  the  owner  of  the  goods  to  delivery 
at  the  port  of  distress  was  immaterial.  But  the  contrary  in- 
terpretation of  Lord  MANSFIELD'S  decision  has  prevailed.2 

§  121.  (d)  Loss  of  vessel  in  course  of  seaman's  service.  — 
Under  the  maxim  of  the  maritime  law  that  "  Freight  is  the 
mother  of  wages,  the  safety  of  the  ship  the  mother  of  freight," 
it  was  held  that  in  case  of  the  loss  of  the  vessel  during  a  voyage 
no  wages  were  recoverable.3  Where  the  ship  was  lost  on  the 
homeward  voyage,  however,  wages  were  allowed  for  service  up 
to  the  arrival  of  the  vessel  at  her  last  port  of  delivery  or  destina- 

1  1876,  1  Q.  B.  D.  613,  620. 

2  See  Dakin  v.  Oxley,   1864,   15  C.  B.  N.  S.  646,  665,  (WILLES,  J. : 
"As  to  freight  pro  rata  itineris,  in  respect  of  goods  accepted,  and  their 
future  carriage  waived,  at  an  intermediate  port,  it  becomes  due,  not 
under  the  charter  party,  but  by  a  new  contract  inferred  from  the  con- 
duct of  the  parties,  ...     It  was  in  such  a  case  that  Lord  Mansfield 
in  Luke  v.  Lyde,  2  Burr.  882,  1  W.  Bl.  190,  said  that  the  merchant, 
'if  he  abandons,  is  excused  freight,  and  he  may  abandon  all  though 
they  are  not  all  lost.'     This  is  correct,  if,  instead  of  'abandon'  be  read 
'decline  to  accept,'  because  it  is  clear,  that,  where  the  goods  have  not 
been  carried  all  the  way,  the  merchant  need  not,  in  order  to  prevent  a 
liability  for  frieght  pro  rata,  give  up  the  property  to  the  shipowner  ; 
and  abandonment,  in  maritime  law,  involves  a  giving  up  of  the  prop- 
erty.") ;  Callender  v.  Ins.  Co.  of  N.  A.,  1813,  5  Binney  (Pa.)  525,  533, 
(TILGHMAN,    C.J.,    after    discussing    Lord    MANSFIELD'S    celebrated 
case  of  Luke  v.  Lyde:  ".  .  .  it  seems  to  have  been  understood,  that 
pro  rata  freight  is  not  due,  unless  the  consent  of  the  merchant,  either  by 
words  or  actions,  has  been  expressly  given,  or  may  be  fairly  deduced, 
to  accept  his  goods  at  an  intermediate  port ;   and  such  consent  being 
given,  the  original  contract  is  dissolved,  and  a  new  one  arises."). 

»  Hernaman  v.  Bawden,  1766,  3  Burr.  1844 ;  Lady  Durham,  1835, 
3  Hagg.  Adm.  196;  Pitman  v.  Hooper,  1837,  3  Sumn.  (U.  S.  C.  C.)  50; 
Fed.  Cas.,  No.  11,185;  Savary  v.  Clements,  1857,  8  Gray  (Mass.)  155; 
Van  Beuren  v.  Wilson,  1828,  9  Cow.  (N.  Y.)  158;  18  Am.  Dec.  491. 
For  additional  authorities,  see  25  Am.  &  Eng.  Ency.  of  Law  (2d  ed.), 
100,  101. 

190 


Chap.  VII]  ILLNESS   OF   CONTRACTOR  [§  122 

tion  before  the  loss,  and  for  one  half  the  time  she  remained  at 
that  port.1 

In  Appleby  v.  Dods?  because  of  an  express  condition  "  that 
no  seaman  shall  demand  or  be  entitled  to  his  wages,  or  any  part 
thereof,  until  the  arrival  of  the  ship  at  the  above  mentioned 
port  of  discharge,"  Lord  ELLENBOROUGH  refused  to  permit  a 
recovery  of  wages  for  the  outward  voyage,  although  it  was 
conceded  that  freight  had  been  earned  for  such  outward  voyage 
and  assumed  that  the  sole  purpose  of  the  condition  quoted  was 
to  prevent  desertion  at  intermediate  ports.  As  pointed  out  in 
a  previous  section  (§  114),  if  it  had  been  proved  that  the  sole 
purpose  of  the  condition  was  to  protect  the  defendant  against 
desertion,  the  plaintiff  would  have  been  entitled,  upon  prin- 
ciple, to  recover  the  value  of  his  part  performance.3 

By  statute,  both  in  England 4  and  in  the  United  States,5 
seamen  are  now  entitled  to  wages  earned  up  to  the  time  of  the 
vessel's  loss  —  a  rule  which  accords  with  quasi  contractual 
principles. 

§  |122.  (e)  Illness  or  death  of  contractor.  —  Since  the  illness 
or  death  of  a  contractor  does  not,  like  fire  or  shipwreck,  deprive 

1  Johnson  v.  Sims,  1800  (?),  1  Pet.  Adm.  (U.  S.,  D.  Pa.)  215;   Fed. 
Gas.,  No.  7413 ;  Cranmer  v.  Gernon,  1807,  2  Pet.  Adm.  (U.  S.,  D.  Pa.) 
390 ;   Fed.  Gas.,  No.  3359 ;   Pitman  v.  Hooper,   1838,  3   Sumn.   (U.  S. 
C.  C.)  286;    Fed.  Gas.,  No.   il,186.      And  see   Mackrell  v.  Simbnd, 
1776,  Abbott  on  "Shipping"   (5th  ed.),  333;  (14th  ed.),  743;   Scott, 
"Cases  on  Quasi-Contracts,"  p.  621. 

2  1807,  8  East  300. 

3  In  Johnson  v.  Sims,  1800,  1  Pet.  Adm.  (U.  S.,  D.  Pa.)  215,  216 ; 
Fed.  Cas.,  No.  7413,  a  stipulation  couched  in  precisely  the  same  words 
as  that  in  Appleby  v.  Dods  was  construed  to  mean,  not  that  the  sailor 
was  not  entitled  to  wages  for  the  outward  voyage,  but  merely  that  he 
was  not  entitled  to  demand  such  wages  until  the  vessel  arrived  at  the 
home  port.     Said  the  court:   "I  will  never  decree  a  forfeiture,  or  loss 
of  wages,  unless  the  law  or  agreement  of  parties  is  fully  and  clearly, 
both  in  expression  and  import,  against  the  claim.     It  does  not  appear 
in  this  case  that  more  than  the  usual  wages  were  agreed  to  be  paid  to 
the  mariner,  though  the  clause  in  question  is  out  of  the  common  course." 

4  7  &  8  Viet.,  c.  112,  §  17;  57  &  58  Viet.,  c.  60,  §  158   (Merchant 
Shipping  Act,  1894). 

5  Rev.  Stat.  U.  S.  §§  4525,  4526;    The  Charles  D.  Lane,  1901,  106 
Fed.  Rep.  746. 

191 


§  122]        MISRELIANCE   ON  UNENFORCEABLE  CONTRACT      [Fart  I 

the  defendant  of  the  fruits  of  part  performance,  the  benefit 
resulting  from  such  part  performance  is  more  obvious  and  the 
element  of  hardship  to  the  defendant  entirely  wanting.  As  a 
result,  it  is  generally  held,  in  the  United  States,  that  the  value 
of  part  performance  may  in  such  cases  be  recovered.1 

In  England,  consistently  with  other  classes  of  cases,  a  re- 
covery is  denied,2  though  Cutter  v.  Powell,3  which  is  generally 
regarded  as  a  leading  case  for  the  English  doctrine,  is  distinguish- 
able, as  is  elsewhere  shown  (ante,  §  113),  in  that  the  terms  of 
the  contract  plainly  indicated  the  intention  of  the  contractor 
to  assume  the  risk  of  illness  or  death.  An  exception  to  the  rule 
is  recognized,  moreover,  in  the  case  of  domestic  servants,  who 
are  by  custom  paid  for  the  actual  services  rendered  by  them.4 

1  Performance  prevented  by  death :     Wolfe  v.  Howes,  1859,  20  N.  Y. 
197,  75  Am.  Dec.  388 ;   Clark  v.  Gilbert,  1863,  26  N.  Y.  279 ;  84  Am. 
Dec.  189;   McClellan  v.  Harris,  1895,  7  S.  D.  447;   64  N.  W.  522; 
Lauda  v.  Shook,  1895,  87   Tex.  608;    30  S.  W.  536,  (death  of  one 
member  of  a  law  firm). 

Performance  prevented  by  illness :  Ryan  v.  Dayton,  1856,  25  Conn. 
188 ;  65  Am.  Dec.  560 ;  Coe  v.  Smith,  1853,  4  Ind.  79 ;  58  Am.  Dec. 
618;  Stolle  v.  Stuart,  1908,  21  S.  D.  643;  114  N.  W.  1007;  Fenton  v. 
Clark,  1839,  11  Vt.  557 ;  Patrick  v.  Putnam,  1855,  27  Vt.  759 ;  Hubbard 
v.  Belden,  1855,  27  Vt.  645.  In  Ryan  v.  Dayton,  supra,  the  court  said 
(p.  194) :  "Viewing  the  present  as  a  contract  for  the  personal  services 
of  the  plaintiff,  and  which  could  only  be  performed  by  himself,  we  think 
that,  from  its  nature,  a  condition  was  impliedly  attached  to  it,  that  an 
inability  to  labor  during  a  part  of  the  time  stipulated,  produced  by 
inevitable  necessity,  should  so  far  constitute  an  excuse  for  not  laboring 
during  that  period,  that  he  should  not  thereby  be  deprived  of  a  right  to 
a  reasonable  compensation  for  the  services  performed  by  him  under  it : 
and  that  the  rule  that  where  a  person  by  his  own  contract,  creates  a 
duty  or  charge  upon  himself,  he  is  bound  to  make  it  good,  if  he  may, 
notwithstanding  any  accident  by  inevitable  necessity,  which  properly 
understood,  we  do  not  intend  to  impugn,  is  not  applicable  to  such  a 
contract."  But  see  Jennings  v.  Lyons,  1876,  39  Wis.  553  ;  20  Am.  Rep. 
57,  allowing  no  recovery  because  illness  of  wife  should  have  been  foreseen. 

In  Alabama,  a  recovery  was  formerly  denied  :  Green  v.  Linton,  1838, 
7  Port.  (Ala.)  133  ;  31  Am.  Dec.  707 ;  but  the  rule,  in  its  application  to 
contracts  of  personal  service,  was  changed  by  statute.  See  Code  of 
1876,  §  2922 ;  Dryer  v.  Lewis,  1877,  57  Ala.  551. 

2  See  Plymouth  v.  Throgmorton,  1688,  1  Salk.  65 ;  Cutter  v.  Powell, 
1795,  6  Term  R.  320;  Bayley  v.  Rimmell,  1836,  1  Mees.  &  Wels.  506. 

3  1795,  6  Term  R.  320. 

4  See  Eversley,  "Domestic  Relations"  (3d  ed.),  p.  872. 

192 


Chap.  VII]  ILLNESS    OF    CONTRACTOR  [§  122 

It  has  been  held,  in  a  case  where  the  plaintiff  engaged  that 
he  and  his  wife  should  live  in  the  defendant's  house  and  maintain 
her  for  life,  that  the  death  of  the  plaintiff's  wife  made  the  con- 
tract impossible  of  performance  and  that  the  plaintiff  might 
recover  the  value  of  the  maintenance  furnished  during  the  wife's 
life.1 

-  An  interesting  extension  of  the  principle  is  found  in  the  cases 
in  which  unanticipated  circumstances  creating  grave  danger  of 
serious  physical  injury  or  disease  are  held  to  have  the  same  ef- 
fect as  actual  illness  —  excusing  default  and  entitling  the 
contractor  to  the  value  of  the  services  rendered  in  partial  per- 
formance.2 

1  Parker  v.  Macomber,  1892,  17  R.  I.  674,  676 ;    24  Atl.  464 ;    16 
L.  R.  A.  858,  (DOUGLAS,  J.,  after  holding  that  death  of  plaintiff's  wife 
justified  defendant  in  rescinding  the  contract:   "The  question  is  then 
presented  whether  a  person  who  has  rendered  personal  services  under 
an  entire  contract,  which  the  Act  of  God  has  prevented  him  from  fully 
performing,  can  recover  upon  an  implied  assumpsit  what  those  services 
are  really  worth.     In  case  of  the  destruction  of  the  fruits  of  the  service 
so  that  neither  party  has  the  value  of  them,  the  loss  must  be  adjusted 
according  to  the  scope  of  the  contract  and  the  circumstances  of  the  case, 
and  different  courts  may  come  to  diverse  conclusions  in  cases  which  are 
very  similar  to  each  other.     But  when,  as  in  this  case,  the  defendant 
has  received  and  retains  the  benefit  of  the  service,  we  think  that  the 
plaintiff  should  recover.     It  is  not  just  that  one  should  benefit  by  the 
labor  of   another  and  make  no  return,  when  the  event  which  ends 
the  service  happens  without  the  fault  of  either  party,  and  is  not  ex- 
pressly or  impliedly  insured  against  in  the  agreement  which  induced 
the  labor.").     See  also  Jennings  v.  Lyon,  1876,  39  Wis.  553;    20  Am. 
Rep.  57. 

2  Lakeman  v.  Pollard,  1857,  43  Me.  463 ;   69  Am.  Dec.  77,  (preva- 
lence of  cholera  in  vicinity) ;    Walsh  v.  Fisher,  1899,  102  Wis.  172 ; 
78  N.  W.  437  ;  43  L.  R.  A.  810 ;  72  Am.  St.  Rep.  865,  (threats  of  strikers 
to  do  bodily  harm).     Cf.  School  Township  of  Carthage  v.  Gray,  1894,  10 
Ind.  App.  428;   37  N.  E.  1059,  and  Dewey  v.  Union  School  District; 
1880,  43  Mich.  480 ;  5  N.  W.  646 ;  38  Am.  Rep.  206,  which  hold  that  the 
closing  of  a  school  by  a  school  committee  on  account  of  the  prevalence 
of  a  contagious  disease  does  not  excuse  the  town  or  district  from  the 
obligation  to  pay  teachers'  wages.     It  would  seem  that  the  court  was 

-  influenced  in  these  cases  by  the  notion  that  the  public  should  pay  for  its 
own  protection.  Says  GRAVES,  J.,  in  Dewey  v.  Union  School  District 
(p.  483) :  "  It  was  the  misfortune  of  the  district,  and  the  district  and  not 
the  plaintiff  ought  to  pay  for  it."  Stewart  v.  Loring,  1862,  5  Allen 
(Mass.)  306;  81  Am.  Dec.  747,  contra. 

193 


§  123]        MISRELIANCE   ON  UNENFORCEABLE  CONTRACT      [Part  I 

§  123.  Same :  Limitation  of  rule.  —  In  the  case  of  the  ill- 
ness or  death  of  one  who  has  undertaken  personally  to  manu- 
facture or  produce  something  for  another,  in  the  course  of  such 
manufacture  or  production  and  before  the  passing  of  title,  the 
part  performance,  if  it  may  be  so  called,  is  obviously  of  no  bene- 
fit to  the  other  party  and  cannot  properly  form  the  basis  of  a 
quasi  contractual  recovery.  This  was  pointed  out  by  JOHNSON, 
C.J.,  in  Wolfe  v.  Howes,1  where  he  is  reported  to  have  observed 
that: 

"It  was  material  that  the  defendants  had  received  actual 
benefit  from  the  services  of  the  plaintiff's  testator,  and  that 
quite  a  different  question  would  be  presented  by  a  case  where 
the  services  actually  rendered  should  prove  valueless;  as, 
e.g.  if  one  should  be  retained  to  compose  any  original  literary 
work,  and  having  faithfully  employed  himself  in  preparation, 
should  die  without  having  completed  any  work  of  value  to  the 
employer." 

§  124.  (/)  Act  of  government.  —  Cases  in  which  the  per- 
formance contemplated  by  a  contract  is  forbidden  at  the  time 
the  contract  is  entered  into  are  treated  in  the  chapter  on  con- 
tracts unenforceable  because  of  illegality.2  Instances  are  not 
rare,  however,  in  which  a  legal  contract  subsequently  becomes 
impossible  of  performance  without  violation  of  law  because  of 
some  governmental  act,  either  executive,  legislative,  or  judicial. 
And  the  right  to  recover  the  benefit  conferred  by  a  partial  per- 
formance of  a  contract,  under  such  circumstances,  has  been 
recognized : 

Jones  v.  Judd,  1850,  4  N.  Y.  411 :  Action  for  work  and 
labor.  The  defendant,  under  contract  with  the  state  to  com- 
plete qertain  sections  of  a  canal,  entered  into  a  subcontract 
with  the  plaintiffs  for  a  part  of  the  work,  by  which  he  agreed 
to  pay  them  seven  cents  per  yard  for  excavating  and  eight 
cents  for  embankment,  monthly,  according  to  measurements  of 
engineers,  except  ten  per  cent  which  was  not  to  be  paid  until 

1  1859,  20  N.  Y.  197,  203 ;  75  Am.  Dec.  388. 
J  Post,  §  132  et  seq. 

194 


Chap.  VII]  ACT   OF   GOVERNMENT  [§  124 

final  estimate.  The  defendant  paid  the  plaintiffs  for  all  work 
performed,  except  the  ten  per  cent  reserved.  GARDINER,  J. 
(p.  413) :  "The  plaintiffs  were  stopped  in  the  prosecution  of 
the  work,  in  fulfillment  of  their  contract,  by  the  authority  of  the 
state  officers.  Before  this  injunction  was  removed,  the  law  of 
March  29, 1842,  for  preserving  the  credit  of  the  state,  was  passed, 
which  put  an  end  to  the  original  contract,  and  the  agreement 
between  the  plaintiffs  and  defendant  which  grew  out  of  it.  As 
the  plaintiffs  were  prevented,  by  the  authority  of  the  state, 
from  completing  their  contract,  they  are  entitled  to  recover 
for  the  work  performed,  at  the  contract  price.  The  ten  per 
cent  was  a  part  of  the  price  stipulated.  It  was  reserved  to 
secure  the  fulfillment  of  the  contract,  and  to  be  paid  upon  a 
final  estimate.  The  performance  of  the  required  condition  be- 
came impossible  by  the  act  of  the  law,  and  of  course  the  plaintiffs 
were  entitled  to  recover  without  showing  a  compliance  with  the 
agreement  in  this  particular."  1 

New  York  Life  Ins.  Co.  v.  Statham;  Same  v.  Seyms;  Man- 
hattan Life  Ins.  Co.  v.  Buck,  1876,  93  U.  S.  24:  The  first 
case  a  bill  in  equity,  the  other  two  actions  at  law,  to  recover 
the  amounts  of  life  insurance  policies.  The  premiums  were 
paid  until  the  outbreak  of  the  Civil  War  which  made  payments 
impossible,  and  the  persons  insured  died  during  the  war.  BRAD- 
LEY, J.  (p.  34) :  "Whilst  the  insurance  company  has  a  right  to 
insist  on  the  materiality  of  time  in  the  condition  of  payment 
of  premiums,  and  to  hold  the  contract  ended  by  reason  of 
non-payment,  they  cannot  with  any  fairness  insist  upon  the 
condition,  as  it  regards  the  forfeiture  of  the  premiums  already 
paid;  that  would  be  clearly  unjust  and  inequitable.  The 
insured  has  an  equitable  right  to  have  this  amount  restored  to 
him,  subject  to  a  deduction  for  the  value  of  the  assurance  en- 
joyed by  him  whilst  the  policy  was  in  existence ;  in  other  words, 
he  is  fairly  entitled  to  have  the  equitable  value  of  his  policy."  2 

1  Also  :  Whitfield  v.  Zellnor,  1852,  24  Miss.  663  ;  Theobald  v.  Burleigh, 
1891,  66  N.  H.  574;  23  Atl.  367;  Heine  v.  Meyer,  1874,  61  N.  Y.  171 ; 
L.  Craddock  &  Co.  v.  Wells-Fargo  Co.,  Express,  1910,         Tex.  Civ. 
App.       ;  125  S.  W.  59,  (cf.  Binz  v.  National  Supply  Co.,  1907,       Tex. 
Civ.  App.       ;   105  S.  W.  543). 

2  For  an  excellent  discussion  of  the  different  views  as  to  the  effect 
of  war  upon  a  policy  of  insurance,  and  the' rights  of  the  insured  at  the 
conclusion  of  the  war,  see  Abell  v.  Penn  Mutual  Life  Ins.  Co.,  1881, 

195 


§  125]        MISRELIANCE  ON  UNENFORCEABLE   CONTRACT      [Part  I 

In  Manhattan  Life  Insurance  Company  v.  Buck,  one  of  the 
three  cases  just  stated  together,  the  decision  of  the  court  is 
questionable.  The  policy  contained  a  clause  not  found  in  the 
policies  involved  in  the  other  two  cases,  that  "  in  every  case 
where  the  policy  should  cease  or  become  null  and  void,  all  pre- 
vious payments  made  thereon  should  be  forfeited  to  the  com- 
pany." This  provision  indicates  that  the  insured  assumed  the 
risk  of  losing  everything  if  for  any  cause  the  policy  were  to  be 
extinguished.  The  case  is  therefore  similar  to  Cutter  v.  Powell,1 
where  the  estate  of  a  ship's  officer  who  died  during  the  voyage 
was  denied  compensation  for  the  services  rendered  before  his 
death  on  the  ground  that  it  was  the  understanding  that  the 
officer  was  to  receive  no  compensation  unless  he  completed  the 
entire  voyage,  and  that  in  consideration  of  the  risk  assumed 
by  him  his  compensation  in  the  event  of  his  completing  the 
voyage  was  to  be  larger  than  it  would  have  been  but  for  this 
understanding.  As  Professor  Keener  has  pointed  out,2  if  Man- 
hattan Life  Insurance  Company  v.  Buck  is  to  be  supported,  it 
must  be  upon  the  theory  that  a  court  of  law  will  relieve  against 
a  forfeiture,  a  doctrine  which  has  usually  been  regarded  as  pe- 
culiar to  equity. 

§  125.  (3)  Measure  of  recovery.  —  Ordinarily  the  plaintiff 
should  be  allowed  to  recover  the  reasonable  worth  of  his  part 
performance,  less  any  payment  or  other  benefit  received  from 
the  defendant.3  In  the  case  of  improvements  upon  land,  for 
instance,  since  they  are  made  at  the  request  of  the  defendant, 
he  should  be  required  to  pay  the  value  of  the  labor  and  materials 
employed  whether  the  land  is  enhanced  in  value  or  not.4  More- 

18  W.  Va.  400,  423.  In  that  case  the  court  criticized  the  measure  of 
recovery  adopted  in  New  York  Life  Ins.  Co.  v,  Statham.  See  post, 
§126. 

1  1795,  6  Term  R.  320. 

2  "Quasi-Contracts,"  p.  247. 

3  Coe  v.  Smith,  1853,  4  Ind.  79 ;   58  Am.  Dec.  618. 

*  Dame  v.  Wood,  1908,  75  N.  H.  38 ;  70  Atl.  1081,  1082.  And  see 
Clark  v.  Gilbert,  1863,  26  N.  Y.  279 ;  84  Am.  Dec.  189,  (services).  But 
see  Binz  v.  National  Supply  Co.,  1907,  Tex.  Civ.  App.  ;  105 
S.  W.  543;  Hubbard  v.  Belden,  1855,  27  Vt.  645,  (services:  actual 
benefit  to  employer  only). 

196 


Chap.  VII]  MEASURE   OF   RECOVERY  [§  125 

over,  though  there  are  authorities  to  the  contrary,1  it  seems  clear 
that  since  the  plaintiff  is  not  guilty  of  breach  of  contract  there 
should  be  no  deduction  for  damages  suffered  by  the  defendant 
by  reason  of  the  plaintiff's  inability  to  complete  performance. 
But  the  recovery  should  in  no  case  be  permitted  to  exceed  an 
amount  bearing  the  same  ratio  to  the  contract  price  for  full  per- 
formance as  the  value  of  the  part  performance  bears  to  the  value 
of  full  performance.2  Otherwise  the  plaintiff  might  actually 
profit  by  the  impossibility  of  completing  performance,  and  the 
defendant,  who  is  not  in  default  and  who  is  not  responsible  for 
the  plaintiff's  failure  to  complete  performance,  might  be  com- 
pelled to  pay  for  the  plaintiff's  part  performance  not  only  at  a 
higher  rate  of  compensation  than  he  actually  agreed  to  pay  but 
at  a  higher  rate  then  he  would  have  been  willing  to  pay. 

In  the  New  York  case  of  Jones  v.  Judd?  arising  out  of  a  con- 
tract expressly  fixing  a  rate  of  compensation  instead  of  an  ag- 
gregate price,  the  plaintiff  was  allowed  to  recover  at  the  contract 
rate  for  his  part  performance.  And  in  the  Indiana  case  of 
Coe  v.  Smith,4  the  court  said  that  "  the  amount  recovered  must, 
in  no  case,  exceed  the  contract  price,  or  the  rate  of  it  for  the  part 
of  the  contract  performed."  As  a  means  of  measuring  the 
recovery,  the  contract  rate  is  of  course  unsatisfactory,  since  it 
does  not  always  accurately  express  the  value  of  the  performance. 
As  a  means  of  limiting  the  recovery,  it  is  satisfactory  in  case  it 
parallels  perfectly  the  value  of  the  services  —  that  is  to  say, 
either  if  the  units  of  service  contemplated  by  the  contract  are 
of  uniform  value,  or  if  the  rate  fixed  by  the  contract  varies  with 
the  variation  in  value.  Otherwise,  it  is  not.  Suppose,  for 
example,  as  was  actually  the  case  in  Jones  v.  Judd,  one  contracts 

1  Clark  v.  Gilbert,  1863,  26  N.  Y.  279 ;  84  Am.  Dec.  189 ;  Patrick  v. 
Putnam,  1855,  27  Vt.  759 ;  Walsh  v.  Fisher,  1899,  102  Wis.  172 ;  78  N. 
W.  437  ;  43  L.  R.  A.  810 ;  72  Am.  St.  Rep.  865.     And  see  Coe  v.  Smith, 
1853,  4  Ind.  79 ;   58  Am.  Dec.  618 ;    Wolfe  v.  Howes,  1859,  20  N.  Y. 
197 ;  75  Am.  Dec.  388. 

2  Dame  v.  Wood,  1908,  75  N.  H.  38;   70  Atl.  1081,  1082;   Clark  v. 
Gilbert,  1863,  26  N.  Y.  279 ;   84  Am.  Dec.  189. 

3  1850,  4  N.  Y.  411. 

4  1853,  4  Ind.  79,  82 ;  58  Am.  Dec.  618. 

197 


§  126]        MISRELIANCE  ON  UNENFORCEABLE   CONTRACT      [Part  I 

to  do  a  large  amount  of  construction  work,  some  parts  of  which 
are  expected  to  be  more  difficult  and  expensive  than  others,  at  a 
uniform  price  per  cubic  yard.  If,  before  performance  is  in- 
terrupted by  impossibility,  the  more  difficult  and  expensive 
work  is  done,  the  benefit  derived  from  such  part  performance  is 
greater  than  the  amount  due  under  the  contract ;  on  the  other 
hand,  if  only  the  less  difficult  and  expensive  part  of  the  work  is 
done,  the  resulting  benefit  is  less  than  the  sum  due  under  the 
contract.  The  true  limit  of  recovery,  in  either  case,  is  such  a 
proportion  of  the  contract  price  as  the  value  of  the  part  per- 
formed bears  to  the  value  of  complete  performance. 

§  126.  Same  :  In  case  of  insurance  contracts.  —  In  New  York 
Life  Insurance  Company  v.  Statham,1  the  United  States  Supreme 
Court  held  that  where  the  outbreak  of  war  prevents  further 
payments  of  premiums  on  an  insurance  policy,  the  insured  is 
entitled  to  recover  the  premiums  paid  by  him  "  subject  to  a 
deduction  for  the  value  of  the  assurance  enjoyed  by  him  whilst 
the  policy  was  in  existence."  This  was  criticized  in  the  West 
Virginia  case  of  Abell  v.  Penn  Mutual  Life  Insurance  Company,2 
as  permitting  the  insurance  company  to  retain  not  only  a  sum  suf- 
ficient to  compensate  it  for  the  risk  it  had  run  but  a  large  ad- 
ditional sum  for  profits.  What  should  be  deducted,  it  was 
there  contended,  is  not  the  "  value  of  the  assurance  "  but  the 
cost  of  the  assurance,  i.e.  the  cost  to  the  company  of  carrying 
the  risk.  But  clearly  the  company  is  enriched  unjustly  only 
to  the  extent  that  the  benefit  it  has  received  —  the  premiums  — 
exceeds  in  value  the  benefit  it  has  conferred  —  the  insurance. 
The  amount  to  be  deducted  therefore  is  the  value  of  the  insur- 
ance to  the  insured,  as  was  held  in  New  York  Life  Insurance 
Company  v.  Statham. 

§  127.  (II)  Defendant's  performance  prevented :  In  general. 
—  Since,  in  the  cases  under  consideration  in  this  chapter,  the 
defendant  is  protected  against  the  contingency  resulting  in  his 
failure  to  perform  by  an  implied  condition,  he  cannot  be  held 
responsible  for  the  damages  sustained  by  the  plaintiff  as  a  re- 

1  1876,  93  U.  S.  24,  34. 

2  1881,  18  W.  Va.  400,  423  et  seq. 

198 


Chap.  VII]      RECOVERY   OF   PREPAID   PURCHASE   PRICE        [§  12S 

suit  of  such  failure.  In  other  words,  the  defendant's  failure  to 
complete  performance  is  not  an  actionable  breach.  But  if  the 
plaintiff,  in  reliance  upon  the  contract  and  in  expectation  of  the 
defendant's  performance,  has  by  his  own  performance  conferred 
a  benefit  upon  the  defendant,  he  is  entitled  to  restitution.1 

§  128.  (1)  Recovery  of  prepaid  purchase  price  of  goods  or  land. 
—  Perhaps  the  most  frequent  application  of  the  rule  is  to  cases 
of  the  destruction  of  or  injury  to  property  while  the  subject  of 
an  executory  contract  of  sale.  In  the  case  of  personal  property 
it  is  the  general  rule  that  payments  made  by  the  buyer  are 
recoverable.2  Where  goods  are  delivered  to  the  buyer,  however, 

1  Knowles  ».  Bovill,  1870,  22  L.  T.  R.  70,  (Action  to  recover  £  150 
paid  for  the  use  of  a  patent  which  the  patentee  was  about  to  renew  and 
for  the  use  of  a  new  patent  which  the  patentee  was  about  to  take  out. 
The  patentee  died  almost  immediately  after  receiving  payment  and 
without  making  the  applications.     Held :  that  the  plaintiff  recover.) ; 
Hudson  v.  Hudson,  1891,  87  Ga.  678 ;  13  S.  E.  583 ;  27  Am.  St.  Rep.  270, 
(Action  by  son  to  recover  value  of  services  in  caring  for  father  under 
contract  by  which  father  agreed  to  will  to  his  son  the  home  place. 
Father  became  insane  and  could  not  make  will.     Held :    that    the 
plaintiff  recover.);  Butterfleld  v.  Byron,  1891,  153  Mass.  517;    27  N. 
E.  667;    12  L.  R.  A.  571;    25  Am.  St.  Rep.  654,  (Action  for  breach 
of  contract  for  the  erection  of  a  building  by  defendant  for  plaintiff. 
Certain  amounts  were  paid  to  defendant,  and  when  the  building  was 
nearly  completed  it  was  destroyed  by  fire.     Held :    that  the  plaintiff 
was  entitled  to  the  money  paid,  subject  to  a  set-off  for  work  and  mate- 
rials furnished  by  defendant.).     See  also  Bibb  v.  Hunter,  1866,  2  Duv. 
(63  Ky.)  494,  where  it  was  held  that  money  paid  by  one  who  had  been 
drafted  to  serve  in  the  United  States  army  to  one  who  had  agreed  to 
become  his  substitute  but  who  had  been  rejected  by  a  revisory  board 
was  recoverable.     But  see  Tweedie  Trading  Co.  v.  James  P.  McDonald 
Co.,  1902, 114  Fed.  984  (D.  C.  N.  Y.),  where  recovery  was  denied  of  a  sum 
paid  under  a  contract  for  the  transportation  of  laborers  from  the  Bar- 
badoes  to  Panama  although,  because  of  a  regulation  of  the  government 
forbidding  the  exportation  of  laborers,  it  became  impossible  to  carry  out 
the  contract.     And  in  Woodward  v.  Cowing,  1816,  13  Mass.  216,  one 
who  had  paid  money  to  an  officer  of  a  privateer  for  a  share  of  the  prizes 
she  might  make  during  a  proposed  cruise,  which  was  prevented  by  the 
declaration  of  peace,  was  not  allowed  to  recover. 

2  Logan  v.  Le  Mesurier,  1847,  6  Moo.  P.  C.  116;    Stone  v.  Waite, 
1890,  88  Ala.  599 ;  7  So.  117 ;  Meagher  v.  Carpenter,  1887,  8  Ky.  Law 
Rep.  (Ky.  Super.  Ct.)  702  ;  Joyce  v.  Adams,  1853, 8  N.  Y.  291 ;  Williams 
v.  Allen,  1849,  10  Humph.  (29  Tenn.)  336;  51  Am.  Dec.  709:   Kelly  v. 
Bliss,  1882,  54  Wis.  187 ;  11  N.  W.  488. 

199 


§  128]        MISRELIANCE   ON  UNENFORCEABLE   CONTRACT      [Part  I 

and  the  title  is  retained  by  the  seller  merely  as  security  for  the 
price,  the  sale  is  in  reality  executed  and  the  subsequent  destruc- 
tion of  the  goods  should  not  be  regarded  as  creating  an  impossi- 
bility of  performance  by  the  seller.1  In  the  case  of  real  property 
a  majority  of  the  courts  which  have  passed  upon  the  question 
have  declared,  apparently  upon  the  assumption  that  the  pur- 
chaser acquires  by  the  contract  the  substantial  rights  of  owner- 
ship, that  the  risk  of  loss  rests  upon  the  purchaser.2  But  in  a 
number  of  important  jurisdictions  this  view  has  been  rejected 
and  the  risk  of  loss  held  to  be  with  the  vendor.3  Where  the 

1  Chicago  Railway,  etc.,  Co.  v.  Merchant's  Bank,  1890,  136  U.  S. 
268,  283;    10  S.  Ct.  999;    Roach  v.  Whitfield  &  Hannah,  1910,  94 
Ark.  448 ;  127  S.  W.  722 ;  Jessup  v.  Fairbanks,  Morse  &  Co.,  1906,  38 
Ind.  App.  673 ;   78  N.  E.  1050 ;    140  Am.  St.  Rep.  131 ;  Phenix  Ins. 
Co.  v.  Hilliard,  1910,  59  Fla.  590;   52  So.  799 ;  138  Am.  St.  Rep.  171 ; 
Burnley  v.  Tufts,  1889,  66  Miss.  48 ;  5  So.  627 ;   14  Am.  St.  Rep.  540; 
Tufts  v.  Wynne  &  Thompson,  1891,  45  Mo.  App.  42;  American  Soda 
Fountain  Co.  v.  Vaughn,  1903,  69  N.  J.  L.  582 ;  55  Atl.  54 ;  National 
Cash  Register  Co.  v.  South  Bay,  etc.,  Assn.,  1909,  64  Misc.  R.  125 ; 
118  N.  Y.  Supp.   1044;    Whitlock  v.  Auburn  Lumber  Co.,   1907,  145 
N.  C.  120;  58  S.  E.  909;  12  L.  R.  A.  (N.  S.)  1214;  Harley  &  Willis 
v.  Stanley,  1909,  25  Okl.  89 ;   105  Pac.  188 ;    138  Am.   St.  Rep.  900 ; 
Goldie  &  McCuUough  v.  Harper,  1899,  31  Ont.  R.  284 ;   Marion  Mfg. 
Co.  v   Buchanan,  1907,  118  Tenn.  238;    99  S.  W.  984;    8  L.  R.  A. 
(N.  S.)  590 ;    Osborn  v.  South  Shore  Lumber  Co.,  1895,  91  Wis.  526 ; 
65  N.  W.  184 ;    Lavalley  v.   Ravenna,  1905,  78  Vt.  152 ;    62  Atl.  47 ; 
2  L.  R.  A.  (N.  S.)  97;   112  Am.  St.  Rep.  898.     Contra:   J.  M.  Arthur 
&  Co.  v.  Blackman,  1894,  63  Fed.  536  (C.  C.,  D.  Wash.) ;    Bishop  ». 
Minderhout,  1900,  128  Ala.  162;    29  So.  11 ;    52  L.  R.  A.  395;    86 
Am.  St.  Rep.  134 ;    Randle  v.  Stone  &  Co.,  1886.  77  Ga.  501,  (and  see 
Whigham  v.  W.  Hall  &  Co.,  1911,  8  Ga.  App.  509;    70  S.  E.  23); 
Swallow  v.  Emery,  1873,  111  Mass.  355.     See  Williston,  "Sales,"  §  304. 

2  Paine  v.  MeUer,  1801,  6  Ves.  349 ;  Kuhn  v.  Freeman,  1875,  15  Kan. 
423 ;  Marks  v.  Tichenor,  1887,  85  Ky.  536 ;  4  S.  W.  225 ;  Brewer  v.  Her- 
bert, 1868,  30  Md.  301 ;  Snyder  v.  Murdock,  1872,  51  Mo.  175 ;  Manning 
v.  North  British,  etc.,  Ins.  Co.,  1907,  123  Mo.  App.  456 ;  99  S.  W.  1095 ; 
Sewellt*.  Underbill,  1908, 127  App.  Div.  92  ;  111  N.  Y.  Supp.  85,  (cf.  Gold- 
man v.  Rosenberg,  1889,  116  N.  Y.  78 ;  22  N.  E.  259) ;  Woodward  v.  Mc- 
Collum,  1907, 16  N.  D.  42 ;  111  N.  W.  623  ;  Dunn  v.  Yakish,  1900, 10  Okl. 
388 ;  61  Pac.  926 ;  Morgan  v.  Scott,  1856,  26  Pa.  St.  51-.     And  see  Sut- 
ton  v.  Davis,  1906,  143  N.  C.  474 ;   55  S.  E.  844 ;   Conklyn  v.  Shenan- 
doah  Milling  Co.,  1911,  68  W.  Va.  257 ;  70  S.  E.  274.     See  also  article 
by  Professor  Williston,  9  Harv.  Law  Rev.  106,  112. 

3  Gould  v.  Murch,  1879,  70  Me.  288 ;   35  Am.  Rep.  325 ;    Wells  v. 
Calnan,  1871,  107  Mass.  514 ;  9  Am.  Rep.  65 ;  Wilson  v.  Clark,  1880, 

200 


Chap.  VII]  RECOVERY   OF   PREPAID   FREIGHT  [§  129 

latter  view  prevails,  payments  advanced  by  the  purchaser  are 
recoverable.1 

§  129.    (2)  Recovery  of  prepaid  freight.  —  The  English  courts 
have  denied  a  quasi  contractual  recovery  in  one  class  of  cases  — 
that  of  freight  prepaid,  —  basing  their  conclusion,  apparently, 
upon  the  theory  that  the  plaintiff  assumed  the  risk  of  impos- 
sibility of  performance  by  the  defendant : 

De  Sihale  v.  Kendall,  1815,  4  Maul.  &  Sel.  37 :  Assumpsit 
to  recover  prepaid  freight,  the  ship  having  been  captured. 
Lord  ELLENBOROUGH,  C.J.  (p.  43) :  "In  the  next  place  the  word 
residue  imports  that  it  is  freight  that  was  to  be  partially  ad- 
vanced, of  which  the  remainder  only  was  to  abide  the  usual 
risk  which  the  law  casts  upon  the  earning  of  freight,  that  is, 
the  conveyance  of  the  cargo  to  its  place  of  destination.  The 
preceding  payment  was  on  the  contrary,  by  the  stipulation  of 
the  parties  not  to  be  subject  to  that  risk,  which  but  for  the 
stipulation  and  by  the  ordinary  course  of  law  it  would  have 
been." 

LE  BLANC,  J.  (p.  44) :  "  If  it  was  intended  that  what  was 
advanced  at  Maranham  should  be  returned  in  the  event  that 
happened,  the  parties  might  have  provided  for  it  by  their  con- 
tract."2 

Professor  Keener  explains  De  Sihale  v.  Kendall  and  like 
cases  as  follows : 3 

"The  ground  upon  which  these  cases  were  decided  seems  to 
have  been  that  as  freight  is  not  in  the  absence  of  express  stip- 

60  N.  H.  352 ;  Powell  v.  Dayton,  etc.,  R.  Co.,  1885,  12  Or.  488.     See 
article  by  Professor  Williston,  9  Harv.  Law  Rev.  106,  113. 

If,  at  the  time  of  the  calamity,  the  vendor  is  not  in  a  position  to 
convey  the  legal  title,  the  loss  falls  on  the  vendor.  Phinizy  v.  Guernsey, 
1900,  111  Ga.  346  ;  36  S.  E.  796 ;  50  L.  R.  A.  680 ;  78  Am.  St.  Rep.  207  ; 
Eppstein  v.  Kuhn,  1906,  225  111.  115;  80  N.  E.  80;  10  L.  R.  A. 
(N.  S.)  117. 

1  See  Thompson  v.  Gould,   1838,  20  Pick.  (Mass.)  134;    Wilson  v. 
Clark,  1880,  60  N.  H.  352  (bill  in  equity). 

2  Accord:  Anon.,  1683,  2  Shower  283;    Saunders  v.  Drew,  1832,  3 
Barn.  &  Ad.  445.     Prepaid  passage  money  is  likewise  not  recoverable 
in  England:   Gillan  v.  Simpkin,  1815,  4  Camp.  241. 

3  "Quasi-Con tracts,"  p.  293. 

201 


§  129]       MISRELIANCE   ON   UNENFORCEABLE   CONTRACT      [Part  I 

illations  payable  until  earned,  and  is  therefore  not  payable  until 
the  completion  of  the  voyage,  the  parties  by  stipulating  for 
the  payment  of  freight  in  advance  must  have  intended  that  as 
to  the  freight  paid,  the  plaintiff  should  assume  the  risk  of  the 
voyage ;  that  had  they  not  so  intended,  there  would  be  found 
in  the  charter  party  an  express  stipulation  requiring  the  return 
of  the  freight  so  paid  in  the  event  of  a  failure  to  complete  the 
voyage." 

This  reasoning,  which  would  apply  with  equal  force  to  the 
case  of  wages  prepaid  to  one  prevented  from  performing  by 
illness  or  death,  is  not  convincing.  Mr.  Justice  BRETT,  in  Alli- 
son v.  Bristol  Insurance  Company,1  supports  it  by  explaining 
that  at  least  in  the  cases  in  which  the  practice  of  prepaying 
freight  arose,  the  shipper  received  a  special  consideration  for  his 
assumption  of  the  risk,  the  inference  being  that  such  .assump- 
tion of  risk  was  either  expressly  agreed  upon  or  clearly  under- 
stood.2 But  there  is  no  evidence  of  a  consideration  for  the 
alleged  assumption  of  risk  in  De  Silvale  v.  Kendall,  and  though 
consistently  followed  in  England  the  rule  in  that  case  has  been 
severely  criticized : 

Byrne  v.  Schiller,  1871,  L.  R.  6  Ex.  319 :  COCKBURN,  C.J. 
(p.  325) :  "It  is  settled  by  the  authorities  referred  to  in  the 
course  of  the  argument,  that  by  the  law  of  England  a  payment 
made  in  advance  on  account  of  freight  cannot  be  recovered 
back  in  the  event  of  the  goods  being  lost,  and  the  freight  there- 
fore not  becoming  payable.  I  regret  that  the  law  is  so.  I 
think  it  founded  on  an  erroneous  principle  and  anything  but 
satisfactory ;  and  I  am  emboldened  to  say  this  by  finding  that 

1  1875,  1  App.  Cas.  209,  226. 

2  His  words  may  be  quoted :  "Although  I  have  said  that  this  course 
of  business  may  in  theory  be  anomalous,  I  think  its  origin  and  exist- 
ence are  capable  of  a  reasonable  explanation.     It  arose  in  the  case  of 
the  long   Indian   voyages.     The   length   of   voyage   would   keep   the 
shipper  far  too  long  a  time  out  of  money ;  and  freight  is  much  more 
difficult  to  pledge  as  a  security  to  third  persons,  than  goods  represented 
by  a  bill  of  lading.    Therefore  the  shipper  agreed  to  make  the  advance 
on  what  he  would  ultimately  have  to  pay,  and  for  a  consideration,  took 
the  risk  in  order  to  obviate  a  repayment,  which  disarranges  business 
transactions.'! 

202 


Chap.  VII]  RECOVERY   OF   PREPAID   FREIGHT  [§  129 

the  American  authorities  have  settled  the  law  upon  directly 
opposite  principles,  and  that  the  law  of  every  European  country 
is  in  conformity  to  the  American  doctrine  and  contrary  to  ours. 
In  France  and  Germany  the  rule  has  been  settled  for  a  long 
time.  .  .  .  But  whatever  may  be  the  true  principle,  I  quite 
agree  that  the  authorities  founded  on  the  ill-digested  case  in 
Shower  [Anon.  2  Show.  283]  are  too  strong  to  be  overcome ;  and 
if  the  law  is  to  be  altered,  it  must  be  done  by  the  legislature  and 
not  by  contrary  decisions." 

In  America,  as  Lord  COCKBURN  remarked  in  the  opinion  just 
quoted,  freight  paid  in  advance  is  held  to  be  recoverable  in  case 
the  contract  of  carriage  becomes  impossible  of  performance.1 
There  is  said  to  be  a  distinction,  however,  between  an  agreement 
to  transport,  as  consideration  for  the  money  advanced,  and  an 
agreement  merely  to  receive  on  board.  In  the  latter  case  the 
impossibility  of  completing  the  voyage  does  not  affect  the  con- 
tract.2 

1  Pitman  ».  Hooper,  1837,  3  Sumn.  (U.   S.  C.  C.)  50;    Fed.  Gas., 
No.  11,185;   Reina  v.  Cross,  1856,  6  Cal.  29;   Griggs  v.  Austin,  1825, 
3  Pick.  (Mass.)  20;   Chase  v.  Alliance  Ins.  Co.,  1864,  9  Allen  (Mass.) 
311;    Phelps  v.  Williamson,  1852,  5  Sandf.  (N.  Y.  Superior  Ct.)  578; 
Emery  v.  Dunbar,  1865,  1  Daly  (N.  Y.  C.  P.)  408.     Prepaid  passage 
money  is  likewise  recoverable  in  America :    Brown  v.  Harris,  1854,  2 
Gray  (Mass.)  359.     But  see  Tweedie  Trading  Co.  v.  James  P.  McDon- 
ald Co.,  1902,  114  Fed.  985,  (recovery  of  prepaid  ship  hire  denied  where 
regulations  of  port  of  lading  prevented  carrier  from  taking  on  laborers). 

2  Watson  v.  Duykink,  1808,  3  Johns.  (N.  Y.)  335,  340,  KENT,  C.J. : 
!"This  agreement  did  not  go  to  the  length  required  by  the  French  law 
of  stipulating  that  the  money  should  at  all  events  be  retained,  but 
it  was  still  particularly  confined  to  the  permission  to  be  received  on 
board,  as  a  passenger,  and  to  load  the  goods  on  board.     Both  these 
parts  of  the  agreement  were  literally  complied  with.     This  can  easily 
be  distinguished  from  an  agreement  to  transport  and  deliver  at  the 
place  of  destination.     In  the  one  case,  the  master  places  his  compen- 
sation upon  the  actual  carriage  and  delivery  of  the  goods.     The  safe 
arrival  of  the  subject  is  a  condition  precedent  to  the  payment.     In  the 
other  case  the  condition  is  rendered  by  receiving  the  goods  on  board, 
and  making  all  due  and  bona  fide  efforts  to  carry  and  deliver  them. 
I  think  this  latter  is,  upon  the  whole,  the  better  construction  of  the 
agreement  before  us,  especially  as  the  practice  of  retaining  advance 
freight,  in  all  such  cases,  must  have  been  known  to  the  parties,  from 
the  usage  which  has  been  found  by  the  jury,  and  as  the  distinction 

203 


§  130]        MISRELIANCE   ON  UNENFORCEABLE  CONTRACT      [Part  I 

§  130.  (3)  Enforcement  of  restitution  impracticable :  Part 
payment  of  unapportionable  consideration.  —  It  has  been  held 
that  if,  at  the  time  the  impossibility  occurs,  the  plaintiff  has 
received  part  of  the  consideration  for  his  performance,  and  the 
consideration  is  not  apportionable,  he  can  recover  nothing: 

Whincup  v.  Hughes,  1871,  L.  R.  6  C.  P.  78 :  Action  to  re- 
cover part  of  the  premium  paid  to  a  master  by  the  father  of  an 
apprentice.  The  master  died  during  the  term  of  service. 
BOVILL,  C.J.  (p.  81) :  "The  general  rule  of  law  is,  that  where 
a  contract  has  been  in  part  performed  no  part  of  the  money 
paid  under  such  contract  can  be  recovered  back.  There  may 
be  some  cases  of  partial  performance  which  form  exceptions 
to  this  rule,  as,  for  instance,  if  there  were  a  contract  to  deliver 
ten  sacks  of  wheat  and  six  only  were  delivered,  the  price  of  the 
remaining  four  might  be  recovered  back.  But  there  the  con- 
sideration is  clearly  severable.  The  general  rule  being  what  I 
have  stated,  is  there  anything  in  the  present  case  to  take  it 
out  of  such  rule  ?  The  master  instructed  the  apprentice  under 
the  deed  for  the  period  of  a  year,  and  then  died.  It  is  clear  law 
that  the  contract,  being  one  of  a  personal  nature,  the  death  of 
the  master,  in  the  absence  of  any  stipulation  to  the  contrary, 
puts  an  end  to  it  for  the  future.  The  further  performance  of 
it  has  been  prevented  by  the  act  of  God,  and  there  is  thus  no 
breach  of  contract  upon  which  any  action  will  lie  against  the 
executor.  That  being  so,  can  any  action  be  maintained  other- 
wise than  upon  the  contract  ?  The  contract  having  been  in 
part  performed,  it  would  seem  that  the  general  rule  must  apply 
unless  the  consideration  be  in  its  nature  apportionable.  I  am 
at  a  loss  to  see  on  what  principle  such  apportionment  could  be 
made.  It  could  not  properly  be  made  with  reference  to  the 
proportion  which  the  period  during  which  the  apprentice  was 
instructed  bears  to  the  whole  term.  In  the  early  part  of  the 
term  the  teaching  would  be  most  onerous,  and  the  services  of 

between  an  agreement  to  receive  on  board,  and  an  agreement  to  trans- 
port and  deliver,  is  not  a  new  refinement,  but  can  be  traced  back  to 
the  text  of  the  civil  law.  The  doctrine  is  recognized  and  adopted  by 
various  authors,  that  if  the  agreement  be  to  pay  freight  for  the  loading 
of  the  article  on  board,  the  freight  is  due,  though  the  article  perish  in 
the  course  of  the  voyage.  This  is  the  language  of  the  civil  law." 

204 


Chap.  VII]  ENFORCEMENT   OF   RESTITUTION  [§  130 

the  apprentice  of  little  value ;  as  time  went  on  his  services  would 
probably  be  worth  more,  and  he  would  require  less  teaching."  l 
Pinkham  v.  Libbey,  1900,  93  Me.  575 ;  45  Atl.  823 ;  49  L. 
R.  A.  693 :  Action  to  recover  money  paid  under  a  contract 
by  which  the  plaintiff  agreed  to  pay  the  defendants  $75,  for  the 
service  of  their  stallion  to  a  mare,  "with  the  privilege  of  return 
for  the  season."  The  service  proved  fruitless,  and  the  exercise 
of  the  "privilege  of  return"  was  prevented  by  the  sickness  and 
death  of  the  stallion.  WHITEHOUSE,  J.  (p.  578) :  "As  before 
stated,  the  contract  price  was  indivisible,  and  incapable  of 
apportionment.  The  payment  made  by  the  plaintiff  cannot, 
upon  the  facts  of  this  case,  be  fairly  deemed  an  overpayment. 
If,  therefore,  the  plaintiff  is  entitled  to  recover  anything,  it 
must  be  the  full  amount  of  the  contract  price.  But  this  would 
be  unjust  to  the  defendants.  It  is  true  the  service  actually  had 
was  ineffectual,  and  of  no  value  to  the  plaintiff,  but  non  con- 
stat  that  the  privilege  of  return  would  have  been  of  any  value. 
The  defendants  made  no  engagement  of  warranty  that  any 
service  would  be  successful."  2 

Upon  principle,   this  limitation  or  rule  is  difficult  to  sup- 
port.    If,   by    "  unapportionable   consideration "   is   meant   a 

1  In  Ferns  v.  Carr,  1885,  28  Ch.  Div.  409,  it  was  held  that  the  father 
of  a  solicitor's  articled  clerk  could  recover  no  part  of  the  premium 
paid  to  the  solicitor,  the  solicitor  having  died  during  the  term  of  serv- 
ice.    Professor  Scott,  in  a  note   in  his  "Cases  on  Quasi-Con trac ts " 
(p.  614),  reports  an  Ohio  case  as  follows:    "In  McCammon  v.  Peck, 
1895,  9  Oh.  Ct.  Ct.  589,  the  sum  of  $1500  was  paid  in  advance  to  J. 
M.  Jordan,  a  distinguished  attorney  of  Cincinnati,  to  carry  a  case  to 
final    determination.     After    performing    services    of    the    admitted 
value  of  $250,  Jordan  died,  and  the  client  brought  suit  to  recover  the 
unearned  portion  of  the  fee.     The  Circuit  Court  permitted  recovery, 
in  what  would  seem  to  be  an  unanswerable  opinion ;    but  on  appeal, 
the  judgment  was  reversed,  without  opinion  by  the  Supreme  Court, 
evidently  acting  upon   the  advice  of    Lord    MANSFIELD   to   'decide 
promptly,    but   never   give   any   reasons   for    your   decisions.     Your 
decisions  may  be  right  but  your  reasons  are  sure  to  be  wrong.'     The 
two  cases  [referring  to  Coe  v.  Smith,  1853,  4  Ind.  79]  are  one  in  prin- 
ciple, and  recovery  should  have  been  permitted  in  the  latter  as  well  as 
in  the  former.     In  both  instances,  however,  the  courts  stood  by  the 
profession."      But  see  Callahan  v.  Shotwell,  Admr.,  1875,  60  Mo.  398. 

2  See  also  Bruce  t;.  Indianapolis  Gas  Co.,  1910,  46  Ind.  App.  193 ; 
92  N.  E.  189. 

205 


§  130]        MISRELIANCE   ON   UNENFORCEABLE  CONTRACT      [Part  I 

consideration  the  executed  part  of  which  cannot  be  separately 
valued  by  reference  to  the  terms  of  the  contract  alone  —  and 
this  appears  to  be  the  interpretation  of  the  English  courts  — 
the  rule  seems  unreasonable.  For  why  may  not  a  jury  ascer- 
tain the  value  of  a  defendant's  part  performance  in  these  cases 
by  evidence  outside  the  contract,  just  as  it  is  permitted  thus 
to  ascertain  the  value  of  a  plaintiff's  part  performance  in  those 
cases  in  which  it  is  the  plaintiff,  and  not  the  defendant,  who  is 
prevented  from  fulfilling  his  engagement?  If  a  consideration 
the  executed  part  of  which  cannot  be  fairly  valued  by  a  jury 
is  meant,  the  rule  itself  is  not  open  to  criticism;  but  in  some 
of  the  cases  it  clearly  has  been  misapplied.  For  while  the  value 
of  the  defendant's  part  performance  may  not  always  be  ascer- 
tainable  with  mathematical  exactness,  it  may  be  as  closely  ap- 
proxi  ated  as  the  value  of  the  plaintiff's  part  performance  in 
the  cases,  above  referred  to,  where  it  is  the  plaintiff  who  is  pre- 
vented from  going  forward.  It  has  been  held,  for  example,  that 
where  an  attorney  is  engaged  to  defend  a  cause  for  a  certain 
sum  but  dies  before  the  determination  of  the  suit,  his  adminis- 
trator may  recover  the  value  of  the  intestate's  part  performance.1 
Why,  then,  in  case  the  attorney's  fee  is  paid  in  advance,  may 
not  the  client  recover  the  amount  paid,  less  the  value  of  the 
attorney's  part  performance  ?  In  both  cases  precisely  the  same 
question  goes  to  the  jury  —  that  of  the  value  of  the  attorney's 
services ;  yet  in  the  latter  case  it  is  said  that  there  may  be  no 
recovery.2  In  the  apprenticeship  cases 3  the  valuation  of  the 
master's  part  performance  undoubtedly  would  be  difficult ; 
but  in  Pinkkam  v.  Libbey,  supra,  it  would  have  been  a  simple 
matter,  one  would  think,  to  ascertain  the  value  of  the  service 
of  the  defendant's  stallion  without  the  privilege  of  return,  which 
is  what  the  plaintiff  received,  and  then  to  allow  a  recovery  of  the 
difference  between  the  sum  paid  and  that  amount. 

1  Coe  v.  Smith,  1853,  4  Ind.  79 ;   58  Am.  Dec.  618. 

2  McCammon  v.  Peck,  1895,  9  Ohio  Circuit  Ct.  589.     See  Scott, 
"Cases  on  Quasi-Contracts,"  p.  614  n.     But  see  Callahan  v.  Shotwell, 
Admr.,  1875,  60  Mo.  398,  (allowing  a  recovery). 

»  Whincup  v.  Hughes,  1871,  L.  R.  6  C.  P.  78. 

206 


Chap.  VII]      ENFORCEMENT   OF   RESTITUTION   UNJUST          [§  131 

§  131.  (4)  Enforcement  of  restitution  unjust :  Change  of 
position.  —  In  some  interesting  cases  arising  from  the  post- 
ponement of  the  great  coronation  processions  and  naval  review 
in  1902,  the  English  courts  held  that  money  paid  in  advance  for 
the  use  of  rooms  or  the  hiring  of  boats  for  the  purpose  of  viewing 
the  processions  or  review,  was  not  recoverable : 

Chandler  v.  Webster,  [1904]  1  K.  B.  493 :  Action  to  recover 
£100  paid  in  advance  on  account  of  rent  of  room  hired  "to 
view  the  first  coronation  procession  on  June  26,  1902."  COL- 
LINS, M.R.  (p.  499) :  "The  plaintiff  contends  that  he  is  en- 
titled to  recover  the  money  which  he  has  paid  on  the  ground 
that  there  has  been  a  total  failure  of  consideration.  He  says 
that  the  condition  on  which  he  paid  the  money  was  that  the 
procession  should  take  place,  and  that,  as  it  did  not  take  place, 
there  has  been  a  total  failure  of  consideration.  That  con- 
tention does  no  doubt  raise  a  question  of  some  difficulty,  and 
one  which  has  perplexed  the  Courts  to  a  considerable  extent 
in  several  cases.  The  principle  on  which  it  has  been  dealt  with 
is  that  which  was  applied  in  Taylor  v.  Caldwell  [3  B.  &.  S. 
826],  —  namely,  that,  where,  from  causes  outside  the  volition 
of  the  parties,  something  which  was  the  basis  of,  or  essential 
to  the  fulfillment  of  the  contract,  had  become  impossible,  so 
that,  from  the  time  when  the  fact  of  that  impossibility  has 
been  ascertained,  the  contract  can  no  further  be  performed  by 
either  party,  it  remains  a  perfectly  good  contract  up  to  that 
point,  and  everything  previously  done  in  pursuance  of  it  must 
be  treated  as  rightly  done,  but  the  parties  are  both  discharged 
from  further  performance  of  it.  If  the  effect  were  that  the  con- 
tract were  wiped  out  altogether,  no  doubt  the  result  would  be 
that  money  paid  under  it  would  have  to  be  repaid  as  on  a 
failure  of  consideration.  But  that  is  not  the  effect  of  the  doc- 
trine; it  only  releases  the  parties  from  further  performance  of 
the  contract.  Therefore  the  doctrine  of  failure  of  consideration 
does  not  apply.  The  rule  adopted  by  the  courts  in  such  cases 
is,  I  think,  to  some  extent  an  arbitrary  one,  the  reason  for  its 
adoption  being  that  it  is  really  impossible  in  such  cases  to  work 
out  with  any  certainty  what  the  rights  of  the  parties  in  the  event 
which  happened  should  be.  Time  has  elapsed,  and  the  position 
of  both  parties  may  have  more  or  less  altered,  and  it  is  im- 

207 


§  131]        MISRELIANCE   ON  UNENFORCEABLE   CONTRACT      [Part  I 

possible  to  adjust  or  ascertain  the  rights  of  the  parties  with 
exactitude.  That  being  so,  the  law  treats  everything  that  has 
already  been  done  in  pursuance  of  the  contract  as  validly  done, 

but  relieves  the  parties  of  further  responsibility  under  it."  : 

\ 

In  the  opinion  just  quoted,  two  reasons  for  denying  restitu- 
tion are  advanced.  The  first,  which  is  admitted  to  be  an  ar- 
bitrary one,  is  that  in  cases  of  the  class  of  Taylor  v.  Caldwell,  in 
which  the  parties  are  excused  from  further  performance,  the 
contract  nevertheless  continues  to  be  "  a  good  and  subsisting 
contract  with  regard  to  things  done,"  and  to  permit  a  recovery 
would  be  to  fly  directly  in  the  face  of  such  a  contract.  This, 
it  is  respectfully  submitted,  is  a  strange  doctrine  —  that  what 
was  originally  a  contract  for  the  payment  of  £141  in  return  for 
the  use  of  a  room,  becomes  upon  the  happening  of  an  event 
which  makes  its  complete  performance  impossible,  "  a  good  and 
subsisting  contract "  for  the  payment  of  £100  in  return  for 
nothing.  The  second  reason,  which  is  evidently  regarded  as 
explaining  and  supporting  the  arbitrary  first  one,  is  that  it  is 
impossible  in  such  cases  accurately  to  adjust  the  rights  of  the 
parties.  "  Time  has  elapsed,"  said  the  court,  "  and  the  posi- 
tion of  the  parties  may  have  been  more  or  less  altered."  It  is 
true,  of  course,  that  the  position  of  the  parties  may  in  some  cases 
be  so  altered  as  to  make  restitution  unjust;  but  it  is  believed 
that  proof  of  such  a  change  of  position  should  be  required  to 
defeat  a  recovery.2  fc\ 

If  the  result  reached  by  the  court  is  to  be  upheld,  the  strongest 
ground  would  seem  to  be  that  in  view  of  the  nature  of  the  con- 
tract and  of  the  fact  that  the  plaintiff  paid  in  advance,  he  should 

1  Accord:   Civil  Service  Coop.  Society  v.  General  Steam  Nav.  Co., 
[1903]  2  K.  B.  756;    Blakely  v.  Muller  and,  Hobson  v.  Pattenden, 
[1903]  2  K.  B.  760,  n. 

2  In  commenting  on  these  cases,  the  learned  editor  of  the  Law 
Quarterly  Review  said  (20  Law  Quart.  Rev.  3)  :     "  We  doubt  whether 
the  resources  of  the  Common  Law  were  not,  at  one  time,  capable  of  a 
nearer  approximation  to  perfect  justice ;  but  the  Court  of  Appeal  has 
fixed  the  rule,  and  such  cases  are  not  very  common,  and  it  is  always 
open  to  parties  to  protect  themselves  by  insurance  or  by  special  terms 
in  the  contract  itself." 

208 


Chap.  VII]       ENFORCEMENT   OF   RESTITUTION   UNJUST        [§  131 

be  regarded  as  having  voluntarily  assumed  the  risk  of  post- 
ponement; such  assumption  of  risk,  as  heretofore  explained 
(ante,  §  16),  being  incompatible  with  misreliance  on  the 
contract.1 

1  See  17  Harv.  Law  Rev.  199.  , 


209 


CHAPTER  VIII 


MISRELIANCE   ON   ILLEGAL  CONTRACT 

§  132.  In  general. 

§  133.  (I)  Misreliance  on  contract :   Assumption  of  risk. 

§  134.  Same :  Mistake  of  law. 

§  135.  (II)  Enforcement  of  restitution  against  public  policy. 

§  136.  Same :   Limitations  of  the  doctrine. 

§  137.  (1)  Plaintiff  ignorant  of  fact  which  makes  contract  illegal. 

§  138.  (2)  Plaintiff  not  in  pari  delicto. 

§  139.  Same :  Classification  of  cases  in  which  plaintiff  is  not  in  pari 

delicto. 

§  140.  (a)  Where  prohibition  is  aimed  at  defendant's  act. 

§141.  (6)  Where  plaintiff  is  induced  to  contract  by  fraud  or  duress. 

§  142.  Same :  The  doctrine  criticized. 

§  143.  Order  of  proof  as  test  of  par  delictum. 

§  144.  (3)  Plaintiff  withdraws  before  illegal  purpose  accomplished : 

Locus  poenitentice. 

§  145.  Same :   The  doctrine  criticized. 

§  146.  Same:    Illegal  purpose  accomplished  in  part. 

§  147.  Same :   Illegal  purpose  thwarted. 

§  148,  (III)  Illegal  transactions  by  agent :  Rights  of  principal. 

§  149.  (IV)  Illegal  transactions  by  partner:    Rights  of  copartner. 

§  150.  (V)  Necessity  of  demand :   Statute  of  limitations :   Interest. 

§  151.  (VI)  Certain  contracts  separately  considered : 

(1)  Marriage  brokage  contracts. 

§  152.  (2)  Wagering  contracts. 

§  153.  (3)  Contracts  made  or  to  be  performed  on  Sunday. 

§  132.  In  general.  —  Certain  contracts  which  are  regarded 
by  the  courts  as  obviously  and  seriously  inimical  to  the  interests 
of  the  state,  as  well  as  all  contracts  forbidden  by  the  legislature, 
are  said  to  be  illegal.  Statutory  prohibitions  are  occasionally 
so  construed  as  not  wholly  to  invalidate,  or  render  unenforce- 
able, contracts  entered  into  in  violation  of  their  provisions,1 
but  as  a  general  rule  illegal  contracts,  although  entered  into  by 
competent  parties  and  possessing  all  of  the  internal  essentials 

1  A  conspicuous  example  is  the  case  of  ultra  vires  contracts  of  cor- 
porations. See  post,  §  154  et  seq. 

210 


Chap.  VIII]  MISRELIANCE   ON   CONTRACT  [§  134 

of  validity,  do  not  give  rise  to  contractual  obligation.  The 
purpose  of  this  chapter  is  to  consider  the  quasi  contractual  ob- 
ligation resulting  from  the  part  performance  of  contracts  unen- 
forceable because  of  illegality.1 

§  133.  (I)  Misreliance  on  contxact :  Assumption  of  risk.  — 
If,  in  performing  an  illegal  contract,  one  is  unconscious  of  any 
question  as  to  its  legality,  his  performance  may  properly  be  said 
to  be  in  misreliance  on  the  contract  (ante,  §  10).  And  the  fact 
that  one's  ignorance  of  the  illegality  of  a  transaction  is  due  to 
his  own  negligence  is  generally  immaterial  (ante,  §  15).  But  if 
one  believes  his  contract  to  be  illegal,  or  indeed  is  conscious  of  a 
doubt  as  to  its  legality,  he  assumes  the  risk  and  cannot  be  said 
to  rely  upon  the  contract  (ante,  §  16).  No  case  arising  out  of 
an  illegal  contract  has  been  found  in  which  the  denial  of  relief 
is  placed  squarely  upon  this  ground.  As  in  the  case  of  contracts 
unenforceable  because  of  the  Statute  of  Frauds  (ante,  §  94), 
this  is  probably  due  in  part  to  a  failure  to  realize  that  the  obli- 
gation to  make  restitution  rests  upon  the  doctrine  of  misreliance, 
and  in  part  to  the  fact  that,  unless  the  question  of  legality  is  a 
subject  of  communication  between  the  parties,  the  state  of  the 
plaintiff's  mind  on  the  question  is  difficult  of  satisfactory  proof. 

§  134.  Same:  Mistake  of  Law.  —  Usually,  in  this  class  of 
cases,  the  mistake — if  there  be  a  mistake  —  is  one  of  law.  Such 
must  inevitably  be  the  case  when  the  illegality  of  the  contract 
results  from  the  character  of  the  contract  itself  or  of  the  per- 
formance contemplated  by  it  —  as  in  gambling  contracts  or 
contracts  to  commit  a  crime.  When  the  illegality  results  from 
the  character  or  condition  of  the  contractor,  however,  the  mis- 
take may  be  either  one  of  law  or  one  of  fact.  Thus,  a  contract 
by  a  corporation  for  the  purchase  of  certain  securities  may  be 
illegal,  not  because  contracts  for  the  purchase  of  such  securities 
are  unconditionally  prohibited,  but  because  the  holding  of  such 
securities  in  excess  of  a  certain  limit  is  forbidden ;  and  in  such 
a  case,  the  mistake  of  the  plaintiff  in  selling  the  bonds  in  re- 

1  If  the  illegal  contract  is  fully  performed  on  both  sides  there  is  no 
basis  for  quasi  contractual  obligation.  See  Stansfleld  v.  Kunz,  1901, 
62  Kan.  797 ;  64  Pac.  614. 

211 


§  135]  MISRELIANCE  ON  ILLEGAL  CONTRACT  [Part  I 

liance  upon  the  ultra  vires  contract  may  arise  either  from  igno- 
rance of  the  prohibition  —  a  mistake  of  law, — or  ignorance  of 
the  extent  of  the  company's  holdings  —  a  mistake  of  fact. 

Although,  in  most  jurisdictions,  money  paid  under  a  mistake 
of  law  as  a  general  rule  may  not  be  recovered  (ante,  §  35),  the 
doctrine  has  rarely  been  applied  to  cases  in  which  the  mistake 
of  law  consisted  of  a  mistake  as  to  the  legality  of  the  contract 
in  the  performance  of  which  the  money  was  paid.1 

§  135.  (II)  Enforcement  of  restitution  against  public  policy.  — 
Under  the  influence  of  the  oft  quoted  maxim  In  pari  delicto 
potior  est  conditio  defendentis,  the  courts  have  established  what 
may  be  said  to  be  a  general  rule,  though  not  free  from  excep- 
tions, that  a  benefit  conferred  by  one  who  is  a  party  to  an  illegal 
contract  may  not  be  recovered.2 

1  An  instance  of  the  denial  of  relief  on  the  ground  that  the  mistake 
as  to  the  legality  of  the  contract  was  a  mistake  of  law  is  found  in 
Valley  R.  Co.  v.  Lake  Erie  Iron  Co.,  1888,  46  Ohio  St.  44 ;    18  N.  E. 
486;    1   L.  R.  A.  412,   (ultra  vires  subscription   to   stock).     And  see 
Harse  v.  Pearl  Life  Assurance  Co.  [1904],  1  K.  B.  558,  (insurance  con- 
tract illegal  for  want  of  insurable  interest) ;  In  re  Mutual,  etc.,  Ins.  Co., 
1899,  107  la.  143;    77  N.  W.  868,  (ultra  vires  insurance  contract). 

2  Browning  v.  Morris,  1778,  Cowp.  790,  (insurance  on  lottery  tickets) ; 
Van  Dyke  v.  Hewitt,  1800,  1  East  96,  (premium  paid  for  insurance  to 
protect  trade  with  enemy) ;  Morck  v.  Abel,  1802,  3  Bos.  &  Pul.  35, 
(premium  on  goods  loaded  in  violation  of  navigation  laws) ;   Taylor  v. 
Chester,  1869,  L.  R.  4  Q.  B.  309,  (banknote  deposited  as  security  for 
debt  arising  on  contract  to  furnish  wine  and  supper  for  debauch  in  a 
brothel) ;   Thomas  v.  City  of  Richmond,  1870,  12  Wall.   (U.  S.)  349, 
(money  paid  for  illegal  currency  of  State  in  rebellion) ;   Dent  v.  Fergu- 
son, 1889,  132  U.  S.  50 ;  10  S.  Ct.  13,  (property  transferred  in  fraud  of 
creditors) ;    Levy  ».  Kansas  City,  1909,  168  Fed.  524 ;    93  C.  C.  A. 
523;  22  L.  R.  A.  (N.  S.)  862,   (money  paid  for  a  pool  license);    Ed- 
wards v.  Randle,  1896,  63  Ark.  318 ;  38  S.  W.  343 ;   36  L.  R.  A.  174 ; 
58  Am.   St.   Rep.   108,   (money  paid  in  purchase  of  fixtures  of  post 
office,  seller  agreeing  to  resign  and  use  his  influence  to  secure  appoint- 
ment of  buyer) ;   Abbe  v.  Marr,  1859,  14  Cal.  210,  (money  paid  in  bet 
on  fake  horse  race) ;    Branham  v.  Stallings,  1895,  21  Colo.  211 ;    40 
Pac.  396 ;  52  Am.  St.  Rep.  213,  (money  paid  in  lottery) ;    Thompson 
Brothers  v.   Cummings,    1881,   68  Ga.   124,  (margins  in  purchase  of 
futures) ;    Shaffner  v.  Pintchback,  1890,  133  111.  410 ;    24  N.  E.  867 ; 
23  Am.  St.  Rep.  624,  (money  paid  to  be  used  in  wagering) ;   Boddie  v. 
Brewer  Brewing  Co.,  1903,  204  111.  352;    68  N.  E.  394,  (money  paid 
for  rent  of  house  for  gambling  purposes) ;     White  v.  Wilson's  Admrs., 

212 


Chap.  VIII]          ENFORCEMENT   OF   RESTITUTION  [§  135 

The  reasons  commonly  given  for  this  rule  of  policy  may  be 
stated  as  follows : 

1.  That  it  operates  to  inflict  a  deserved  punishment  upon 
the  plaintiff  for  participating  in  an  unlawful  transaction.1 

2.  That  it  warns  persons  who  contemplate  illegal  transactions 
that  they  enter  upon  them  at  their  own  risk  and  must  bear  any 
and  all  consequences  that  may  result.2 

3.  That  it  saves  the  courts  from  the  indignity  of  devoting 
their  time  and  attention  to  the  settlement  of  disputes  between 
lawbreakers.3 

4.  That  by  closing  the  courts  to  lawbreakers,  the  suits  of 
honest  litigants  are  expedited.4 

1897,  100  Ky.  367 ;  38  S.  W.  495 ;  37  L.  R.  A.  197,  (loan  of  money  by 
participant  in  game  to  pay  losses  at  cards) ;  Smith  v.  Richmond,  1902, 
114  Ky.  303;  70  S.  W.  846,  (money  paid  to  be  used  for  bribery); 
Chapman  v.  Haley,  1904,  117  Ky.  1004;  80  S.  W.  190,  (money  paid  for 
counterfeit  money) ;  Harvey  v.  Merril,  1889,  150  Mass.  1 ;  22  N.  E. 
49 ;  5  L.  R.  A.  200 ;  15  Am.  St.  Rep.  159,  (money  advanced  by  broker  in 
contract  for  futures) ;  Walhier  v.  Weber,  1905,  142  Mich.  322 ;  105 
N.  W.  772,  (money  paid  for  police  immunity) ;  Daimouth  v.  Bennett, 
1853,  15  Barb.  (N.  Y.  Sup.  Ct.)  541,  (money  paid  to  compound  a  sup- 
posed felony) ;  Edwards  v.  City  of  Goldsboro,  1906,  141  N.  C.  60 ; 
53  S.  E.  652;  4  L.  R.  A.  (N.  S.)  589,  (money  paid  to  secure  location  of 
public  building) ;  Hooker  v.  DePalos,  1876,  28  Ohio  St.  251,  (money 
paid  in  lottery);  Grant  ».  Ryan,  1872-73,  37  Tex.  37,  (cattle  sold 
under  contract  to  pay  for  them  in  Confederate  money) ;  Miller  v. 
Larson,  1865,  19  Wis.  463,  (money  paid  on  champertous  contract). 

1  Bartle v. Nutt,  1830,4  Pet.  (U.  S.)  184,  189,  Mr.  Justice  BALDWIN: 
"The  law  leaves  the  parties  to  such  a  contract  [to  defraud  the  govern- 
ment] as  it  found  them.     If  either  has  sustained  a  loss  by  the  bad 
faith  of  a  particeps  criminis,  it  is  but  a  just  infliction  for  premeditated 
and  deeply  practiced  fraud."       See  also  McCullen  v.  Hoffman,  1899, 
174  U.  S.  639,  669 ;   19  S.  Ct.  839. 

2  See  Russell  v.  Courier  Printing,  etc.,  Co.,  1908,  43  Colo.  321,  325; 
95  Pac.  936,  (influencing  act  of  administrative  officer). 

3  Tappenden  v.  Randall,  1801,  2  Bos.  &  Pul.,  467,  471,  HEATH,  J. : 
"Undoubtedly  there  may  be  cases  where  the  contract  may  be  of  a 
nature  too  grossly  immoral  for  the  court  to  enter  into  any  discussion 
of  it ;   as  where  one  man  has  paid  money  by  way  of  hire  to  another  to 
murder  a  third  person."     Smith  v.  Richmond,  1902,  114  Ky.  303,  309; 
70  S.  W.  846,  GUFFY,  C.J. :    "This  does  not  seem  to  be  the  purpose 
for  which  the  courts  of  this  state  are  erected  or  are  existing." 

See  also  Bartle  v.  Nutt,  1830,  4  Pet.  (U.  S.)  184,  189. 

4  See  Cooley,  "Torts"  (3d  ed.),  p.  261. 

213 


§  136]  MISRELIANCE   ON  ILLEGAL  CONTRACT  [Part  I 

The  rule  has  been  severely  criticized,1  and  the  reasons  stated 
above  are  not  thoroughly  convincing.  As  to  the  first,  it  is 
certainly  both  unscientific  and  unreasonable  to  punish  a  wrong- 
doer by  permitting  another  wrongdoer  to  profit  at  his  expense. 
As  to  the  second,  the  effectiveness  of  the  deterrent  may  be 
doubted,  for  the  parties  to  contracts,  whether  lawful  or  unlaw- 
ful, usually  contemplate  performance,  and  at  the  outset  rarely 
weigh  the  consequences  of  a  breach.  The  third  and  fourth  are 
difficult  of  evaluation,  but  seem  hardly  adequate  to  support 
the  rule.  However,  in  view  of  the  fact  that  the  parties  to  un- 
lawful contracts  usually  realize  that  they  are  unenforceable 
and  therefore  cannot  be  said  to  misrely  upon  them  (ante,  §  133), 
and  in  view  of  the  limitations  upon  the  rule,  considered  in  the 
following  sections,  it  is  probable  that  there  are  comparatively 
few  cases  in  which  the  rule  works  serious  hardship. 

§  136.  Same :  Limitations  of  the  doctrine.  —  The  doctrine 
of  the  preceding  section  is  generally  regarded  as  inoperative : 

1.  When  the  plaintiff  is  ignorant  of  the  fact  which  made  the 
contract  illegal. 

1  Professor  Wigmore,  in  discussing  the  doctrine  under  considera- 
tion, says  (25  Am.  Law  Rev.  712  n.) :  "But  the  whole  notion  is  radi- 
cally wrong  in  principle  and  produces  extreme  injustice.  If  A  owes  B 
$5000  why  should  he  not  pay  it  whether  B  has  violated  a  statute  or 
not  ?  Where  the  issue  is  as  to  the  rights  of  two  litigants,  it  is  unscien- 
tific to  impose  a  penalty  incidentally  by  depriving  one  of  the  litigants 
of  his  admitted  right.  It  is  unjust,  also,  for  two  reasons :  first,  one 
guilty  party  suffers,  while  another  of  equal  guilt  is  rewarded  ;  secondly, 
the  penalty  is  usually  utterly  disproportionate  to  the  offense.  If* 
there  is  one  part  of  criminal  jurisprudence  which  needs  even  more 
careful  attention  than  it  now  receives  it  is  the  apportionment  of  penalty 
to  offense.  Yet  the  doctrine  now  under  consideration  requires,  with 
monstrous  injustice  and  blind  haphazard,  that  the  plaintiff  shall  be 
mulcted  in  the  amount  of  his  right,  whatever  that  may  be.  Take  for 
example  the  case  of  Cambriozo  v.  Maffet  (2  Wash.  C.  C.  98),  in  which 
plaintiff  and  defendant  were  joint  owners  of  a  vessel.  To  avoid  pay- 
ing the  tax  on  alien  owners,  the  vessel  was  registered  in  the  name  of 
the  defendant.  For  this  illegality  the  plaintiff  is  denied  the  help  of 
the  courts  in  making  the  defendant  account  for  the  vessel's  profits. 
In  this  way,  and  in  a  hundred  similar  ways,  a  fine  of  thousands  of 
dollars  may  be  imposed  for  petty  violations  of  the  law.  One  cannot 
imagine  why  we  have  so  long  allowed  such  an  unworthy  principle  to 
remain." 

214 


Chap.  VIII]        PLAINTIFF   NOT   IN   PARI   DELICTO  [§  138 

2.  When  the  plaintiff  is  not  in  pari  delicto  with  the  defendant. 

3.  When  the  plaintiff  withdraws  from  the  contract  before 
its  illegal  purpose  is  accomplished. 

§  137.  (1)  Plaintiff  ignorant  of  fact  which  makes  contract 
illegal. — If  the  plaintiff,  when  he  confers  the  benefit  sought  to 
be  recovered,  is  ignorant  of  the  fact  which  makes  his  contract 
illegal,  relief  will  be  afforded.  If  the  defendant  is  aware  of  the 
fact  which  brings  the  contract  within  the  inhibition  of  the  law, 
it  may  be  said  that  the  parties  are  not  in  pari  delicto.  But 
even  if  the  defendant,  like  the  plaintiff,  is  ignorant  of  the  fact, 
and  consequently  there  is  no  difference  in  degree  of  guilt,  the 
plaintiff  will  be  permitted  to  recover : 

Hentig  v.  Staniforth,  1816,  5  Maul.  &  Sel.  122 :  Action  to 
recover  premium  paid  on  a  policy  of  marine  insurance.  The 
voyage  insured  was  illegal  unless  licensed.  The  plaintiff, 
residing  abroad,  sent  a  letter  to  his  agent  directing  that  a  license 
be  obtained,  but  the  vessel  carrying  the  letter  was  delayed  by 
contrary  winds  and  the  license  was  not  issued  until  after  the 
voyage  had  commenced.  The  insurance  policy  had  therefore 
been  held  void.  Lord  ELLENBOROUGH,  C.J.  (p.  125):  "In 
the  present  case,  a  state  of  facts  was  supposed  to  exist,  and 
reasonably  so  supposed,  under  which,  if  the  expectation  of  the 
parties  had  been  realized,  the  voyage  would  have  been  legal. 
Unfortunately  for  the  plaintiff  his  expectation  was  disappointed, 
and  he  lost  the  benefit  of  his  insurance ;  but  he  contemplated 
a  legal  voyage  and  a  legal  contract.  And  we  think,  therefore, 
that  he  is  not  a  party  to  a  violation  of  the  law,  and  is  entitled 
to  recover  back  his  premium,  as  money  paid  without  considera- 
tion/' 

The  plaintiff's  ignorance  or  mistake  as  to  the  law,  however, 
will  not  enable  him  to  recover  (see  ante,  §  134),  even  though 
it  be  due  to  the  innocent  misrepresentations  of  the  defendant.1 

§  138.  (2)  Plaintiff  not  in  pari  delicto.  —  In  the  case  of  a  con- 
tract malum  in  se,  it  is  said,  no  difference  in  degree  of  delin- 
quency will  be  recognized.  Thus,  one  who  hired  another  to 

1  Harse  v.  Pearl  Life  Assurance  Co.,  [1904]  1  K.  B.  558,  (insurance 
illegal  for  want  of  insurable  interest). 

215 


§  138]  MISRELIANCE  ON  ILLEGAL  CONTRACT  [Part  I 

commit  murder  would  not  be  allowed  to  recover  the  money 
paid,  even  though  induced  to  contract  by  the  false  representa- 
tions of  the  assassin.  But  where  a  contract  is  malum  pro- 
hibitum  only,  the  court  may  undertake  to  discriminate  between 
the  major  and  minor  offender.  This  distinction  is  well  put  by 
WILDE,  J.,  in  Lowell  v.  Boston  and  Lowell  Railroad  Corporation : l 

"In  respect  to  offenses  in  which  is  involved  any  moral  de- 
linquency or  turpitude  all  parties  are  deemed  equally  guilty, 
and  courts  will  not  inquire  into  their  relative  guilt.  But  where 
the  offense  is  merely  malum  prohibitum,  and  is  in  no  respect 
immoral,  it  is  not  against  the  policy  of  the  law  to  inquire  into 
the  relative  delinquency  of  the  parties,  and  to  administer 
justice  between  them,  although  both  parties  are  wrongdoers."  2 

Accordingly,  where  the  contract  is  malum  prohibitum  and 
the  plaintiff  is  not  in  pari  delicto,  restitution  will  be  enforced ; 3 
and  this  is  true  whichever  party  first  repudiates  the  illegal 
transaction  and  whether  or  not  the  illegal  purpose  of  the  con- 
tract has  been  accomplished.4 

1 1839,  23  Pick.  (Mass.)  24,  32;  34  Am.  Dec.  33. 

2  See  also  Smith  v.  Bromley,   1760,  2  Doug.  696,  (money  paid  to 
secure  signature  of  creditor  to  bankrupt's  certificate) ;    Kitchen  v. 
Greenabaum,  1875,  61  Mo.  110,  (lottery  ticket) ;  Tracy  v.  Talmage, 
1856,  14  N.  Y.  162 ;  67  Am.  Dec.  132,  (bank's  illegal  purchase  of  stock). 

3  Browning  v.  Morris,  1778,  Cowp.  790,  (premium  paid  for  insurance 
of  lottery  tickets) ;    Wenninger  v.  Mitchell,  1909,  139  Mo.  App.  420 ; 
122  S.  W.  1130,  (marriage  brokage  contract) ;  Tracy  v.  Talmage,  1856, 
14  N.  Y.  162 ;  67  Am.  Dec.  132,  (bank's  illegal  purchase  of  stock).     See 
also  cases  cited  in  following  sections. 

4  Professor  Keener  treats  of  the  obligation  to  make  restitution  where 
the  parties  are  not  in  pari  delicto  under  the  caption :  "Obligation  of  a 
Defendant  in   Default    under  a  Contract    unenforceable   because  of 
Illegality."     This  suggests  that  the  doctrine  may  be  invoked  only  when 
the  defendant  has  refused  or  failed  to  perform ;  an  implication  which  is 
followed  by  the  express  statement    ("Quasi-Contracts,"  p.  275)  that 
"it  is  necessary  for  the  plaintiff  to  show  a  failure  of  consideration,  and 
this  he  can  do  only  by  showing  that  the  defendant  has  failed  to  perform 
a  contract  in  exchange  for  which  the  benefit  was  conferred  by  the  plain- 
tiff."    In  many  of  the  cases  hereinafter  cited,  however,  there  is  no  evi- 
dence that  the  defendant  was  in  default. 

216 


Chap.  VIII]        PLAINTIFF   NOT   IN   PARI   DELICTO  [§  140 

§  139.  Same:  Classification  of  cases  in  which  plaintiff  is 
not  in  pari  delicto.  —  The  cases  in  which  the  plaintiff  has  been 
declared  not  to  be  in  pari  delicto  may  all  be  included,  it  is 
thought,  within  two  classes,  as  follows : 

1.  Where  the  prohibition  of  a  statute,  or  of  the  common 
law,  under  which  the  contract  is  declared  illegal,  is  aimed    at 
the  act  of  the  defendant  and  not  at  that  of  the  plaintiff. 

2.  Where  the  plaintiff  appears  to  have  been  induced  to  enter 
into  the  illegal  contract  by  fraud,  duress,  oppression,  or  unfair 
dealing. 

§  140.  (a)  Where  prohibition  is  aimed  at  defendant's  act. 
—  A  statutory  or  common  law  prohibition  under  which  a  con- 
tract is  held  illegal  may  be  said  to  be  aimed  at  the  act  of  the 
defendant  rather  than  that  of  the  plaintiff,  either  when  it  is 
primarily  intended  to  restrain  persons  in  the  position  of  the 
defendant  or  of  a  class  represented  by  the  defendant,  or  when 
it  is  primarily  intended  to  protect  persons  in  the  position  of 
the  plaintiff  or  of  a  class  represented  by  the  plaintiff.  As 
illustrations  of  the  former  sort  may  be  mentioned  prohibitions 
against  the  sale  of  liquor l  and  prohibitions  against  the  ac- 
ceptance by  banks  of  deposits  to  be  repaid  on  a  day  certain.2 
If  such  prohibitions  are  violated,  the  liquor  seller  or  the  bank, 
as  the  case  may  be,  is  the  real  offender,  not  the  purchaser  of 
the  liquor  or  the  depositor,  and  money  paid  by  such  purchaser 
or  depositor  may  be  recovered.  In  the  Kansas  case  of  Stans- 
field  v.  Kunz,3  in  which  a  recovery  of  money  paid  under  a  con- 
tract to  purchase  a  stock  of  liquor  from  a  druggist,  who  was 
prohibited  to  sell  liquor  except  for  medical,  mechanical,  and 
scientific  purposes  or  to  one  holding  a  druggist's  permit,  was 
allowed,  the  court  said : 

"  The  inhibition  of  the  law  is  not  upon  the  purchaser,  but  upon 
the  seller ;  and  if  this  agreement  to  sell  had  been  consummated, 
plaintiff  in  error  [seller]  would  have  been  guilty  of  a  misdemeanor. 

^tansfield  v.  Kunz,  1901,  62  Kan.  797;  64  Pac.  614.  See  also 
Walan  v.  Kerby,  1868,  99  Mass.  1. 

2  White  v.  Franklin  Bank,  1839,  22  Pick.  (Mass.)  181. 
3 1901,  62  Kan.  797,  800 ;  64  Pac.  614. 

217 


§  140]  MISRELIANCE  ON  ILLEGAL  CONTRACT  [Part  I 

If  it  had  been  fully  consummated,  the  court  would  not  have 
relieved  either  party.  Its  illegality  consists  in  the  plaintiff  in 
error  contracting  to  sell  a  person  to  whom  the  law  forbade  him, 
and  not  in  the  purchaser  contracting  to  purchase,  because  the 
law  does  not  forbid  him  from  so  doing.  The  parties  are  there- 
fore not  in  equal  fault.  The  duty  imposed  by  the  law  was  im- 
posed upon  the  plaintiff  in  error  and  not  upon  the  defendant  in 
error." 

Illustrations  of  prohibitions  primarily  intended  to  protect 
persons  in  the  position  of  the  plaintiff  or  of  a  class  represented 
by  the  plaintiff,  are  usury  laws  (post,  §  223)  and  laws  forbidding 
contracts  by  which  a  person  is  charged  more  than  the  statutory 
price  for  prosecuting  a  pension  claim.1  Of  the  same  class  is 
a  statute  making  it  unlawful  to  sell  a  patent  right  without 
filing  copies  of  the  letters  patent  together  with  an  affidavit 
that  the  letters  patent  are  genuine,  have  not  been  revoked  or 
annulled,  and  that  the  vendor  has  full  authority  to  sell.  In 
an  action  by  the  buyer  of  a  patent  right  to  rescind  his  contract 
as  illegal  under  the  last  mentioned  statute,  and  to  recover  the 
value  of  property  delivered  and  money  paid  in  part  perform- 
ance of  such  contract,  the  Supreme  Court  of  Kansas  declared 
that  the  parties  were  not  in  pari  delicto  because,  "  the  duties 
prescribed  by  the  statute  are  imposed  upon  the  vendor  of 
patent  rights,  and  are  provided  for  the  protection  of  purchasers.2 

1  Smart  v.  White,  1882,  73  Me.  332 ;   40  Am.  Rep.  356 ;    Ladd  v. 
Barton,  1886,  64  N.  H.  613 ;  6  Atl.  483. 

2  Mason  v.  McLeod,  1896,  57  Kan.  105,  110 ;  45  Pac.  76 ;  41  L.  R.  A. 
548 ;  57  Am.  St.  Rep.  327. 

In  Smith  v.  Bromley,  1760,  2  Doug.  696,  697,  action  was  brought 
to  recover  money  paid  under  an  illegal  contract  by  which  the  defendant 
signed  a  certificate  consenting  to  the  discharge  in  bankruptcy  of  a 
relative  of  the  plaintiff.  Lord  MANSFIELD,  in  allowing  a  recovery,  said  : 
"If  the  act  is  in  itself  immoral,  or  in  violation  of  the  general  laws  of 
public  policy,  there  the  party  paying  shall  not  have  his  action ;  for 
where  both  parties  are  equally  criminal  against  such  general  laws,  the 
rule  is  potior  est  conditio  defendentis.  But  there  are  other  laws,  which 
are  calculated  for  the  protection  of  the  subject  against  oppression, 
extortion,  deceit,  etc.  If  such  laws  are  violated,  and  the  defendant 
takes  advantage  of  the  plaintiff's  condition  or  situation,  there  the  plain- 
tiff shall  recover."  Cf.  Kearley  v.  Thomson,  1890,  24  Q.  B.  D.  742. 

218 


Chap.  VIII]        PLAINTIFF   NOT   IN   PARI   DELICTO  [§  141 

In  many  cases  the  intention  of  the  legislature  to  discriminate 
between  the  parties  to  the  prohibited  transaction  is  evinced 
by  the  imposition  of  a  penalty  on  one  party  only,  or  by  the 
express  limitation  of  the  prohibition  to  the  act  of  one  party 
only : 

Browning  v.  Morris,  1778,  Cowp.  790 :  Action  to  recover 
premiums  paid  for  illegal  insurance  of  lottery  tickets.  Lord 
MANSFIELD  (p.  793) :  "And  it  is  very  material  that  the  statute 
itself,  by  the  distinction  it  makes,  has  marked  the  criminal: 
For  the  penalties  are  all  on  one  side ;  upon  the  office-keeper."  1 

§  141.  (6)  Where  plaintiff  is  induced  to  contract  by  fraud  or 
constraint.  —  The  second  class  of  cases  in  which  one  party  is 
regarded  as  the  lesser  offender  consists  of  those  in  which,  al- 

Laws  prohibiting  lotteries  have  likewise  been  held  to  be  for  the 
protection  of  one  class  from  another.  Jaques  v.  Golightly,  1776,  2 
W.  Bl.  1073 ;  Browning  v.  Morris,  1778,  Cowp.  790 ;  Jaques  ».  Withy, 
1788,  1  H.  Bl.  65  ;  Barclay  v.  Pearson,  [1893]  2  Ch.  154 ;  Gray  v.  Roberts, 
1820,  2  A.  K.  Marsh.  (9  Ky.)  208 ;  12  Am.  Dec.  383 ;  Mount  v.  Waite, 
1811,  7  Johns.  (N.  Y.)  434.  In  Gray  v.  Roberts,  supra,  the  court  said 
(p.  209):  "The  Act  of  1769,  for  preventing  and  suppressing  private 
lotteries,  which  was  the  law  in  force  at  the  time  of  the  contract  in  this 
case,  appears  manifestly,  from  the  preamble  of  the  act,  to  have  been 
designed  by  the  legislature  to  protect  the  interest  of  others  against  the 
devices  of  those  who  should  set  up  a  lottery ;  and  the  enacting  clause  is 
made  to  operate  upon  the  latter  only.  For  it  is  only  persons  who  set 
up  the  lottery,  and  not  those  who  purchase  the  ticket,  that  offend 
against  the  provisions  of  the  act." 

1  Also :  Williams  v.  Hedley,  1807,  8  East  378,  (usury) ;  Stansfield  v. 
Kunz,  1901,  62  Kan.  797 ;  64  Pac.  614,  (liquor) ;  Mason  v.  McLeod, 
1896,  57  Kan.  105 ;  45  Pac.  76 ;  41  L.  R.  A.  548 ;  57  Am.  St.  Rep.  327, 
(patents) ;  Gray  v.  Roberts,  1820,  2  A.  K.  Marsh.  (9  Ky.)  208 ;  12  Am. 
Dec.  383,  (lottery) ;  Smart  v.  White,  1882,  73  Me.  332 ;  40  Am.  Rep. 
356,  (pension  claim) ;  White  v.  Franklin  Bank,  1839,  22  Pick.  (Mass.) 
181,  (deposit  in  bank  for  time  certain) ;  Bateman  v.  Robinson,  1882, 
12  Neb.  508;  11  N.  W.  736,  (sale  of  preemption  claim);  Edgerly  v. 
Hale,  1901,  71  N.  H.  138;  51  Atl.  679,  (excessive  fees) ;  Tracy  v.  Tal- 
mage,  1856,  14  N.  Y.  162 ;  67  Am.  Dec.  132,  (bank's  ultra  vires  purchase 
of  stock) ;  Curtis  v.  Leavit,  1857,  15  N.  Y.  9,  (banking  loans) ;  Burk- 
holder  v.  Beetem's  Admrs.,  1870,  65  Pa.  St.  496,  (illegal  sale  of  stock  by 
bank  cashier).  See  Walan  v.  Kerby,  1868,  99  Mass.  1,  in  which  it  ap- 
peared that  the  statute  explicitly  gave  to  the  buyer  of  liquor  sold  in 
violation  of  law  the  right  to  recover  payments  made  upon  such  purchase/ 

219 


§  141]  MISRELIANCE   ON  ILLEGAL  CONTRACT  [Part  I 

though  the  prohibition  is  not  for  the  protection  of  one  person 
against  another,  one  is  actually  induced  or  constrained  to  enter 
into  or  to  perform  a  prohibited  contract  by  the  fraud,  duress 
or  oppression  of  the  other.  Fraud  is  a  tort  and  in  some  cases 
an  action  to  recover  the  value  of  a  benefit  conferred  in  the  per- 
formance of  a  contract  induced  by  fraud  is  allowed  as  a  remedy 
alternative  to  that  of  an  action  for  damages  (post,  §§  179,  281). 
Furthermore,  not  only  fraud  but  duress  and  undue  influence  are 
always  ground  for  rescinding  a  contract.  The  right  to  rescind 
usually  implies  the  right  to  recover  a  benefit  conferred  before 
rescission ;  but  when  the  contract  is  illegal  one  who  seeks  resti- 
tution encounters  the  rule  of  policy  that  courts  will  not  assist 
a  party  to  an  illegal  transaction.  This  obstacle  is  overcome  by 
the  doctrine  of  this  section — that  one  who  has  been  defrauded  or 
unduly  influenced  is  not  in  pari  delicto.  The  doctrine  has  been 
relied  upon  in  a  variety  of  cases,  —  most  frequently,  perhaps, 
in  actions  to  recover  money  paid  or  property  transferred  under 
contracts  entered  into  for  the  purpose  of  stifling  a  threatened 
prosecution l  or  of  obtaining  the  acceptance  of  a  composition 
with  creditors,2  but  occasionally  in  other  cases.3 

1  Woodham  v.  Allen,  1900,  130  Cal.  194 ;  62  Pac.  398,  (threatened 
prosecution  of  plaintiff's  husband) ;    Klein  v.  Pederson,  1902,  65  Neb. 
452 ;   91  N.  W.  281,  (threatened  prosecution  of  plaintiff) ;  Corringe  v. 
Reed,  1901,  23  Utah  120 ;  63  Pac.  902 ;  90  Am.  St.  Rep.  692,  (threatened 
prosecution  of  plaintiff's  husband) ;    Hinsdell  v.  White,  1861,  34  Vt. 
558,  (threatened  prosecution  of  plaintiff's  son).     And  see  Schoener  v. 
Lissauer,  1887,  107  N.  Y.  Ill  ;x!3  N.  E.  741,  (threatened  prosecution  of 
plaintiff's  son).     Contra :  Haynes  v.  Rudd,  1886, 102  N.  Y.  372 ;  7  N.  E. 
287 ;  55  Am.   Rep.  815,   (threatened  prosecution  of  plaintiff's  son) ; 
Johnson  v.  Douglas,  1903,  32  Wash.  293 ;  73  Pac.  374,  (money  paid  to 
secure  dismissal  of  prosecution). 

2  Smith  v.  Cuff,  1817,  6  Maul.  &  Sel.  160;  Atkinson  ».  Denby,  1861, 
6  Hurl.  &  Nor.  778 ;  7  Hurl.  &  Nor.  934 ;  Brown  v.  Everett,  etc.,  Co., 
1900,  111  Ga.  404 ;  36  S.  E.  813. 

3  Osborne  v.  Williams,  1811, 18  Ves.  Jr.  379,  (sale  of  post  office  packet : 
illegal  consideration  secured  by  vendor) ;    Wright  v.    Stewart,   1904, 
130  Fed.  905,   (aff.  Stewart  v.  Wright,  1906,  147  Fed.  321 ;  77  C.  C.  A. 
499),  (fake  foot  race) ;    In  re  Arnold  Co.,  1904,  133  Fed.  789,  (money 
advanced  for  gambling) ;   American  Mutual  Life  Ins.  Co.  v.  Bertram, 
1904,  163  Ind.  51 ;   70  N.  E.  258 ;  64  L.  R  A.  935,  (assignment  or  in- 
surance  policy  to  person  without  insurable  interest) ;    Metropolitan 

220 


Chap.  VIII]       PLAINTIFF    NOT   IN   PARI   DELICTO  [§  141 

In  American  Mutual  Life  Insurance  Company  v.  Bertram,1 
the  plaintiff  had  been  induced  to  take  an  assignment  of  a  policy 
of  insurance  upon  a  life  in  which  she  had  no  insurable  interest 
by  the  fraudulent  representations  of  the  officers  and  agents 
of  the  company  that  the  policy  was  valid  and  that  she  would 
be  entitled  to  recover  upon  it  in  case  of  loss,  whereas  in  fact 
the  policy  had  been  issued  originally  without  the  knowledge 
of  the  person  whose  life  was  insured  and  to  a  person  having 
no  insurable  interest  therein.  In  an  action  to  recover  the  assess- 
ments paid,  the  court  said : 

"It  cannot  be  said  that  the  parties  to  this  transaction  were 
in  pari  delicto,  or  that  the  appellant  ought,  in  good  conscience, 
to  retain  the  moneys  paid  to  it  by  the  appellee.  The  representa- 
tions made  to  the  appellee  by  the  officers  and  agents  of  the 
company  —  one  of  them  being  its  vice  president  and  treasurer 
—  were  calculated  to  impose  upon  and  mislead  any  one  con- 
templating the  purchase  of  a  policy  previously  issued  by  the 
company.  The  parties  did  not  stand  upon  an  equal  footing, 
and  the  officers  and  agents  making  the  false  representations 
to  the  appellee  had  every  advantage  over  her  which  their  special 
knowledge  of  the  facts  of  the  case,  and  of  the  law  of  insurance 
applicable  to  their  company  could  give." 

In  Webb  v.  Fulchire,2  one  who  had  bet  that  he  could  tell  which 
of  three  cups  covered  a  ball  and  had  lost  because  of  dishonest 

Life  Ins.  Co.  v.  Blesch,  1900,  22  Ky.  Law  Rep.  530 ;  58  S.  W.  436,  (in- 
surance policy  without  insurable  interest) ;  Musson  v.  Fales,  1820,  16 
Mass.  332,  (contract  with  alien  enemy) ;  Hess  v.  Culver,  1889,  77  Mich. 
598;  43  N.  W.  994;  6  L.  R.  A.  498;  18  Am.  St.  Rep.  421,  (Bohemian 
oats :  illegal  bond) ;  Prewett  v.  Coopwood,  1855,  1  George  (30  Miss.) 
369,  (assignment  to  defraud  alleged  creditors) ;  Ford  v.  Harrington, 
1857,  16  N.  Y.  285,  (assignment  to  defraud  creditors) ;  Duval  v.  Well- 
man,  1891,  124  N.  Y.  156;  26  N.  E.  343,  (marriage  brokage) ;  Webb 
v.  Fulchire,  1843,  3  Ired.  (25  N.  C.)  485 ;  40  Am.  Dec.  419,  (pea  game). 
Contra :  Plaisted  v.  Palmer,  1874,  63  Me.  576,  (assumpsit  to  recover  back 
the  price  of  a  horse  on  account  of  fraud  of  the  vendor :  recovery  denied 
because  the  sale  was  made  on  Sunday) ;  Kitchen  v.  Greenabaum, 
1875,  61  Mo.  110,  semble. 

1  1904,  163  Ind.  51,  62  ;  70  N.  E.  258 ;  64  L.  R.  A.  935. 

2 1843,  3  Ired.  (25  N.  C.)  485,  486 ;  40  Am.  Dec.  419. 

221 


§  142]  MISRELIANCE  ON  ILLEGAL  CONTRACT  [Part  I 

manipulation  by  the  winner  was  allowed  to  recover  the  money 
paid.    Said  RUFFIN,  C.J. : 

"It  is  not  denied  that  the  law  gives  no  action  to  a 
party  to  an  illegal  contract,  either  to  enforce  it  di- 
rectly, or  to  recover  back  money  paid  on  it  after  its  execution. 
Nor  is  it  doubted,  that  money  fairly  lost  at  play  at  a  forbidden 
game  and  paid,  cannot  be  recovered  back  in  an  action  for 
money  had  and  received.  But  it  is  perfectly  certain,  that 
money,  won  by  cheating  at  any  kind  of  game,  whether  allowed 
or  forbidden,  and  paid  by  the  loser  without  knowledge  of  the 
fraud,  may  be  recovered.  .  .  .  Surely,  the  artless  fool,  who 
seems  to  have  been  alike  bereft  of  his  senses  and  his  money,  is 
not  to  be  deemed  a  partaker  in  the  same  crime,  in  pari  delicto, 
with  the  juggling  knave,  who  gulled  and  fleeced  him." 

In  the  last  mentioned  case,  it  may  be  noted,  the  fraud  which 
led  the  court  to  hold  that  the  parties  were  not  in  pari  delicto 
was  not  in  the  inducement  to  contract  which  the  defendant 
held  out  to  the  plaintiff,  but  was  committed  after  the  contract 
had  been  entered  into.  In  other  cases  of  a  like  character,  the 
same  conclusion  has  been  reached,1  but  in  Babcock  v.  Thompson 2 
the  Supreme  Court  of  Massachusetts  declared  that  one  who, 
by  entering  an  unlawful  gambling  game,  "  puts  himself  in  a 
condition  to  be  cheated,"  will  not  be  assisted  by  the  court 
but  must  look  out  for  himself. 

§  142.  Same :  The  doctrine  criticized.  —  The  rule  that  one 
who  has  been  induced  by  fraud  or  forced  by  some  sort  of  con- 
straint to  enter  into  an  unlawful  contract  will  be  relieved  from 
his  engagement  and  allowed  to  recover  money  or  property 

1  Catts  v.  Phalen,  1844,  2  How.  (U.  S.)  376,  (lottery  prize  paid  for  a 
ticket  fraudulently  drawn) ;  Northwestern  Mut.  Life  Ins.  Co.  v.  El- 
liott, 1880,  7  Saw.  (U.  S.  C.  C.)  17,  5  Fed.  225,  (money  paid  on  aniUegal 
insurance  policy  upon  fraudulent  representations  of  death  of  insured) ; 
Stewart  v.  Wright,  1906,  147  Fed.  321 ;  77  C.  C.  A.  499,  (money  wa- 
gered on  a  fake  foot  race) ;  Hobbs  v.  Boatright,  1906,  195  Mo.  693 ;  93 
S.  W.  934;  5  L.  R.  A.  (N.  S.)  906;  113  Am.  St.  Rep.  709,  (money  wa- 
gered on  a  fake  foot  race). 

2 1826,  3  Pick.  (Mass.)  446,  449;  15  Am.  Dec.  235,  (gambling). 
See  also  Schmitt  v.  Gibson,  1910,  12  Cal.  App.  407 ;  107  Pac.  571,  (fake 
fight). 

222 


Chap.  VIII]       PLAINTIFF   NOT   IN   PARI   DELICTO  [§  142 

with  which  he  has  parted  in  its  performance,  is  probably  salutary. 
But  the  reason  usually  given  for  the  rule  — that  the  parties  to 
such  a  contract  are  not  in  pari  delicto  —  is  unsatisfactory. 
One  who  is  constrained  to  make  an  unlawful  contract  by  duress 
or  undue  influence,  it  is  true,  is  not  an  intentional  offender 
against  the  law.  The  same  may  be  said  of  one  who  is  induced 
by  fraudulent  representations  of  a  character  that  conceals  the 
illegality  of  the  transaction.  Thus,  a  British  subject  who  is 
induced  to  contract  with  an  American  during  a  war  between 
England  and  the  United  States  by  the  representation  of  the 
American  that  he  is  a  subject  of  Spain,  is  not  a  wilful  law- 
breaker.1 But  one  who,  although  induced  to  contract  by  fraud, 
is  fully  aware  that  he  is  embarking  upon  an  unlawful  adventure, 
offends  just  as  seriously  as  if  there  were  no  fraud.  For  example, 
one  who  deliberately  enters  into  a  contract  for  the  purpose  of 
defrauding  his  creditors  is  by  no  means  absolved  from  blame 
by  the  fact  that  he  is  persuaded  to  make  the  contract  by  false 
representations  as  to  the  condition  of  his  estate.2  It  may  be 
contended  that  while  in  such  a  case  the  offense  of  the  victim 
is  not  mitigated  by  the  fraud,  the  offense  of  the  perpetrator  is 
aggravated.  Perhaps  this  justifies  the  conclusion  that  the 
parties  to  an  illegal  contract  tainted  with  fraud  or  improper 
constraint  are  not  in  pari  delicto.  It  would  seem,  however, 
that  the  real  underlying  reason  for  permitting  a  recovery  in 
all  cases  of  fraud  or  constraint  is  not  that  the  plaintiff's  delin- 
quency is  less  than  the  defendant's,  but  that  the  policy  of  deny- 
ing relief  to  parties  who  have  engaged  in  unlawful  transactions 
is  overborne  by  the  more  important  policy  of  protecting  per- 
sons from  fraud,  duress,  and  undue  influence.  In  other  words, 
the  true  doctrine  is  that  one  whose  consent  to  a  contract  or  to 
the  performance  of  a  contract  is  secured  by  fraud  or  constraint 
will  not  be  denied  the  assistance  of  the  courts  in  obtaining 
restitution,  even  though  in  making  the  contract  he  wittingly 
or  unwittingly  violates  the  law.  This  theory  of  the  rule,  while 
not  generally  accepted,  appears  to  have  been  adopted  by  the 

1  See  Musson  v.  Fales,  1820,  16  Mass.  332. 

2  See  Prewett  v.  Coopwood,  1855,  1  George  (30  Miss.)  369. 

223 


§  143]  MISRELIANCE   ON  ILLEGAL  CONTRACT  [Part  I 

Supreme  Court  of  the  United  States  in  the  case  of  Na- 
tional Bank  and  Loan  Company  v.  Petrie,1  in  which  Mr. 
Justice  HOLMES  said : 

"The  right  not  to  be  led  by  fraud  to  change  one's  situation 
is  anterior  to  and  independent  of  the  contract.  The  fraud  is 
a  tort.  Its  usual  consequence  is  that  as  between  the  parties 
the  one  who  is  defrauded  has  the  right,  if  possible,  to  be  restored 
to  his  former  position.  That  right  is  not  taken  away  because 
the  consequence  of  its  exercise  will  be  the  undoing  of  a  for- 
bidden deed.  That  is  a  consequence  to  which  the  law  can 
have  no  objection,  and  the  fraudulent  party,  who  otherwise 
might  have  been  allowed  to  disclaim  any  different  obligation 
from  that  with  which  the  other  had  been  content,  has  lost  his 
right  to  object  because  he  has  brought  about  the  other's  consent 
by  wrong."  2 

§  143.  Order  of  proof  as  test  of  par  delictum.  —  There  are 
occasional  dicta  to  the  effect  that  no  claim  will  be  allowed 
by  the  courts  which  cannot  be  established  without  proof  of  an 
illegal  transaction.3  In  most  of  the  cases  the  claim  sought  to 

1 1903,  189  U.  S.  423,  425 ;  23  S.  Ct.  512,  (unauthorized  purchase  of 
bonds  by  bank  officer). 

.  2  See  also  Kiewert  ».  Rindskopf,  1879,  46  Wis.  481,  484;  1  N.  W. 
163,  (money  obtained  to  be  paid  on  an  illegal  contract).  But  see 
Plaisted  v.  Palmer,  1874,  63  Me.  576,  (sale  of  horse  on  Sunday)  ; 
Robeson  v.  French,  1846,  12  Met.  (Mass.)  24 ;  45  Am.  Dec.  236,  (horse 
trade  on  Sunday) ;  Northrup  v.  Foot,  1835,  14  Wend.  (N.  Y.)  248, 
(sale  of  horse  on  Sunday). 

3  See  Simpson  v.  Bloss,  1816,  7  Taunt.  246,  (wager) ;  Fivaz  v. 
Nicholls,  1846,  2  C.  B.  501,  (agreement  to  suppress  prosecution) ; 
McMullen  ».  Hoffman,  1898,  174  U.  S.  639,  654 ;  19  S.  Ct.  839,  (secret 
agreement  between  bidders) ;  Butler  v.  Agnew,  1908,  9  Cal.  App.  327, 
332;  99  Pac.  395,  (secret  agreement  between  vendor's  agent  and  pur- 
chaser); Roselle  v.  Beckemeir,  1896,  134  Mo.  380;  35  S.  W.  1132, 
(lottery) ;  Woodworth  v.  Bennett,  1871,  43  N.  Y.  273 ;  3  Am.  Rep. 
706,  (illegal  agreement  between  bidders) ;  Swan  v,  Scott,  1824,  11  Serg. 
&  R.  (Pa.)  155,  (land  lottery) ;  Columbia  Bank,  etc.,  Co.  v.  Haldeman, 
1844,  7  Watts  &  Serg.  (Pa.)  233 ;  42  Am.  Dec.  229,  (bond  to  indemnify 
stakeholder) ;  Holt  v.  Green,  1873,  73  Pa.  St.  198 ;  13  Am.  Rep.  737, 
(violation  of  revenue  law ;  cf.  Johnson  v.  Hulings,  1883,  103  Pa.  St.  498 ; 
49  Am.  Rep.  131,  sale  by  unlicensed  broker) ;  Packer  &  Field  v.  Byrd, 
1905,  73  S.  C.  1 ;  51  S.  E.  678 ;  6  L.  R.  A.  (N.  S.)  547,  (monopoly) ; 
Wald's  Pollock,  J'Contracts"  (Williston's  ed.),  497. 

224 


Chap.  VIII]       PLAINTIFF   NOT   IN   PARI   DELICTO  [§  143 

be  enforced  was  for  the  breach  of  the  illegal  contract  itself  or 
of  a  contract  collateral  to  or  in  some  way  connected  with  the 
illegal  contract.  But  in  Taylor  v.  Chester,1  the  rule  was  applied 
to  a  claim  sounding  in  quasi  contract,  and  it  was  declared  that 
"  The  true  test  for  determining  whether  or  not  the  plaintiff 
and  the  defendant  were  in  pari  delicto  is  by  considering  whether 
the  plaintiff  could  make  out  his  case  otherwise  than  through  the 
medium  and  by  the  aid  of  the  illegal  transaction."  2 

Whether  or  not  the  rule  is  of  value  in  determining  the 
enforceability  of  contracts  collateral  to  or  indirectly  relating 
to  illegal  transactions,3  as  a  test  for  determining  the  question 
of  par  delictum  it  has  been  condemned  by  judges  and  com- 
mentators alike  and  is  obviously  without  merit.4  Aside  from 
its  artificiality  in  subordinating  a  question  of  substance  to  one 
of  form,  it  would  unquestionably  operate  with  marked  inequality 
and  injustice.  In  many  cases  the  rule  would  prevent  the  relief 
of  persons  who  are  the  victims  of  actual  fraud  or  oppression, 
or  who  are  intended  to  be  protected  by  the  law  which  makes 
the  contract  illegal.  For  in  order  to  establish  the  right  to 
restitution,  a  plaintiff  must  prove  the  circumstances  under 
which  he  conferred  the  benefit.  This  means  that  he  must  put 
the  contract  in  evidence,  and  if  the  contract  were  unlawful 
on  its  face  he  would  thereby  establish  the  fact  that  he  was  in 

1  1869,  L.  R.  4  Q.  B.  309,  (wine  supplied   to   brothel).     See  also 
Herman  v.  Jeuchner,  1885,  15  Q.  B.  D.  561,  (indemnity  of  surety) ; 
Short  v.  Bullion-Beck,  etc.,  Co.,  1899,  20  Utah  20 ;    57  Pac.  720 ;  45 
L.  R.  A.  603,  (contract  in  violation  of  eight-hour  law). 

2  Opinion  of  MELLOR,  J.,  p.  314. 

8  In  Hanauer  v.  Woodruff,  1872,  15  Wall.  (U.  S.)  439,  443,  an  action 
upon  a  note  given  in  consideration  of  illegal  bonds,  the  Supreme  Court 
declared  that  this  test  "is  too  narrow  in  its  terms  and  excludes  many 
cases  where  the  plaintiff  might  establish  his  case  independently  of  the 
illegal  transaction,  and  yet  would  find  his  demand  tainted  by  that 
transaction."  See  also  Coppell  v.  Hall,  1868,  7  Wall.  (U  S.)  542; 
Baltimore,  etc.,  R.  Co.  v.  Diamond  Coal  Co.,  1899,  61  Ohio  St.  242 ; 
55  N.  E.  616. 

4  Plaisted  v.  Palmer,  1874,  63  Me.  576,  (sale  of  horse  on  Sunday) ; 
Sampson  v.  Shaw,  1869,  101  Mass.  145 ;  3  Am.  Rep.  327,  (agreement,  for 
a  corner) ;  Keener,  "Quasi-Contracts,"  p.  275;  Scott,  "Cases  on  Quasi- 
Contracts,"  p.  686,  note. 

225 


§  144]  MISRELIANCE   ON  ILLEGAL  CONTRACT  [Part  I 

pari  delicto,  regardless  of  the  circumstances  of  the  formation 
of  the  contract  and  of  the  purpose  of  the  law  in  prohibiting 
it.  Occasionally,  on  the  other  hand,  it  would  enable  the  plain- 
tiff to  recover  though  in  reality  quite  as  guilty  as  the  defendant. 
For  instance,  if  A  were  to  pay  money  to  B  under  a  lawful  con- 
tract, but  subsequently  were  to  agree  with  B  that  B  should 
expend  it  in  an  unlawful  joint  attempt  to  make  a  "  corner  " 
in  a  certain  stock,  A  might  obtain  relief  upon  the  ground  that 
he  was  not  in  pari  delicto.  He  would  establish  a  claim  against 
B  by  proving  the  lawful  contract,  and  although  B  were  to  put 
in  evidence  the  unlawful  contract  subsequently  entered  into,  the 
court  would  be  obliged  to  hold  that  A,  since  he  did  not  resort 
to  the  illegal  contract  to  prove  his  case,  was  not  as  guilty  as  B.1 
|  144.  (3)  Plaintiff  withdraws  before  accomplishment  of 
illegal  purpose :  Locus  pcenitentiae.  —  It  is  frequently  said 
that  one  who  pays  money  or  transfers  property  under  a  contract 
malum  prohibitum  may  recover  the  same  if  he  rescinds  the 
illegal  contract  before  it  is  executed.2  A  more  accurate  state- 
ment of  the  rule,  however,  is  that  one  who  withdraws  before 
the  illegal  object  is  accomplished  is  entitled  to  recover.3  For 

1  See  Sampson  v.  Shaw,  1869,   101  Mass.  145 ;    3  Am.   Rep.  327. 
In  this  case  the  court  said  (p.  152) :   "The  application  of  the  maxim, 
in  pari  delicto,  etc.,  does  not  depend  upon  any  technical  rule  as  to  which 
party  is  the  first  to  urge  it  upon  the  court  in  the  pleadings." 

2  Lowry   v.   Bourdieu,    1780,  Doug.    468,   471,   (insurance   without 
interest) ;  Tappenden  v.  Randall,  1801,  2  Bos.  &  Pul.  467,  471,  (wager) ; 
Spring  Co.  v.  Knowlton,  1880,  103  U.  S.  49,  60,  (ultra  vires  issue  of  stock) ; 
McCutcheon  v.  Merz  Capsule  Co.,  1896,  71  Fed.  787,  795 ;    19  C.  C.  A. 
108 ;   37  U.  S.  App.  586,  (ultra  vires  agreement  to  combine) ;  White  v. 
Franklin  Bank,  1839, 22  Pick.  (Mass.)  181,  (ultra  vires  contractof  bank) ; 
Skinner  v.  Henderson,   1846,   10  Mo.  205,  207,  (lease  of  preemption 
right) ;  Brown  v.  Timmany,  1851,  20  Ohio  81,  86,  (Sunday  contract) ; 
Bernard  v.  Taylor,  1893,  23  Or.  416,  422 ;   31  Pac.  968 ;    18  L.  R.  A. 
859 ;   37  Am.  St.  Rep.  693,  (wager  on  foot  race) ;  McCall  v.  Whaley, 
1909,  52  Tex.  Civ.  App.  646;   115  S.  W.  658,  (contract  to  influence  a 
public  officer) ;   Deaton  v.  Lawton,  1905,  40  Wash.  468 ;   82  Pac.  879, 
880;  111  Am.  St.  Rep.  922,  (contract  by  unlicensed  physician  to  render 
services). 

3  Taylor  v.  Bowers,  1876,  1  Q.  B.  D.  291,  300,  (delivery  of  goods  to 
defraud  creditors) ;  Herman  v.  Jeuchner,  1885,  15  Q.  B.  D.  561,  (in- 
demnity of  surety:   overruling  Wilson  v.  Strugnell,  1881,  7  Q.  B.  D. 
548,  in  which  it  was  held  that  plaintiff  could  recover  because  the  contract 

226 


Chap.  VIII]  PLAINTIFF   WITHDRAWS  [§  144 

the  true  purpose  of  this  exception  to  the  general  rule  is  to  pre- 
vent, not  the  execution  of  the  contract,  but  —  what  may  be 
quite  different  —  the  consummation  of  the  contemplated 
violation  of  law.  Thus,  one  who  enters  into  a  contract  on 
Sunday,  in  violation  of  the  statute,  should  under  no  circum- 
stances be  permitted  to  recover,  for  the  violation  of  law  is 
complete  the  moment  the  contract  is  made  (post,  §  153).  So, 
one  who,  for  the  purpose  of  enabling  a  company  to  have  a 
fictitious  credit  in  case  of  inquiries  at  their  bankers,  places  money 
to  their  credit  under  an  agreement  that  it  shall  not  be  used  for 
the  general  purposes  of  the  company  but  returned  to  the  lender, 
cannot  recover  the  money  upon  the  company  becoming  in- 
solvent.1 

This  opportunity  to  withdraw  from  an  illegal  contract  and 
recover  the  value  of  a  benefit  conferred  in  its  performance  is 
called  locus  pcenitentice.  It  exists  without  reference  to  the 
question  of  par  delictum,2  being  offered,  not  for  the  purpose 
of  saving  the  plaintiff  from  hardship,  but  with  the  hope  of  pre- 
venting the  violation  of  law.  The  wisdom  of  the  doctrine  has 
occasionally  been  doubted,3  and  in  a  few  cases  it  has  been 

had  not  been  executed) ;  Wasserman  v.  Sloss,  1897,  117  Cal.  425,  430; 
49  Pae.  566 ;  38  L.  R.  A.  176 ;  59  Am.  St.  Rep.  209,  (stocks  advanced  for 
bribery) ;  Eastern  Expanded  Metal  Co.  v.  Webb,  etc.,  Co.,  1907,  195 
Mass.  356 ;  81  N.  E.  251,  (labor  and  materials  furnished  in  construction 
of  lower  part  of  building :  plans  for  roof  contravened  statute). 

1  In  re  Great  Berlin  Steamboat  Co.,  1884,  26  Ch.  D.  616,  620,  ("The 
object,"  said  LINDLEY,  L.J.,  "for  which  the  advance  was  made  was 
attained  as  the  company  continued  to  have  a  fictitious  credit  till  the 
commencement  of  the  winding-up.     After  that  I  think  it  was  too  late 
for  the  Appellant  to  repudiate  the  bargain  and  claim  the  money."). 
See  also  Herman  v.  Jeuchner,  1885,  15  Q.  B.  D.  561. 

2  Spring  Co.  v.  Knowlton,  1880,  103  U.   S.  49,  60.     In  this  case 
WOODS,  J.,  said:  "The  rule  is  applied  in  the  great  majority  of  cases, 
even  when  the  parties  to  the  illegal  contract  are  in  pari  delicto,  the  ques- 
tion which  of  the  parties  is  more  blamable  being  often  difficult  of  solu- 
tion and  quite  immaterial." 

This  is  not  always  understood.  See  Wright  v.  Stewart,  1904,  130 
Fed.  905. 

3  See  Kearley  v.  Thomson,  1890,  24  Q.  B.  D.  742,  746,  (Money  paid  to 
secure  discharge  in  bankruptcy.     "It  is  remarkable,"  says  FRY,  L.J., 
after  quoting  from  the  opinion  of  MELLISH,  L.J.,  in  Taylor  v.  Bowers, 
1.  Q.  B.  D.  291,  "that  this  proposition  is,  as  I  believe,  to  be  found  in  no 

227 


§  145]  MISRELIANCE  ON  ILLEGAL  CONTRACT  [Part  I 

flatly  rejected,1  but  in  one  or  the  other  of  the  two  forms  in  which 
it  is  stated  above,  it  has  been  very  generally  adopted. 

§  145.  Same :  The  doctrine  criticized.  —  Professor  Harriman 
contends2  that  the  accomplishment  or  non-accomplishment  of 
the  illegal  purpose  is  not  a  satisfactory  test  for  determining 
whether  or  not  one  who  rescinds  should  be  allowed  to  recover  : 

"Thus  if  money  is  paid  to  induce  one  to  commit  a  crime, 
to  allow  the  recovery  of  the  money  before  the  commission  of 
the  crime  would  tend  to  induce  the  recipient  of  the  money  to 
commit  the  crime,  and  thereby  insure  the  retention  of  the 
money ;  while  if  A  were  to  transfer  a  ship  to  B  in  order  that  B 
might  commit  piracy,  to  allow  A  to  recover  the  ship  would 
tend  to  prevent  the  crime  by  depriving  B  of  the  means  of  com- 
mitting piracy." 

This  distinction  between  the  case  of  money  paid  or  goods 
delivered  in  consideration  of  an  illegal  promise  and  that  of 
money  paid  or  goods  delivered  to  be  used  as  the  instrument 
or  means  of  accomplishing  an  illegal  object  was  previously 
suggested  by  Sir  William  Anson  in  his  treatise  on  contracts,3 

earlier  case  than  Taylor  v.  Bowers,  which  occurred  in  1867,  and,  not- 
withstanding the  very  high  authority  of  the  learned  judge  who  expressed 
the  law  in  the  terms  which  I  have  read,  I  cannot  help  saying  for  myself 
that  I  think  the  extent  of  the  application  of  that  principle,  and  even  the 
principle  itself,  may,  at  some  time  hereafter,  require  consideration,  if 
not  in  this  Court,  yet  in  a  higher  tribunal ;  and  I  am  glad  to  find  that 
in  expressing  that  view  I  have  the  entire  concurrence  of  the  Lord  Chief 
Justice."). 

1  Smith  v.  Richmond,  1902,  114  Ky.  303  ;  70  S.  W.  846 ;   102  Am.  St. 
Rep.  283,  (money  for  bribes) ;  Chapman  v.  Haley,  1904,  117  Ky.  1004; 
80  S.  W.  190,  (sale  of  counterfeit  money) ;  Knowlton  v.  Congress,  etc., 
Spring  Co.,  1874,  57  N.  Y.  518,  (but  see  Spring  Co.  v.  Knowlton,  1880, 
103  U.  S.  49  :   ultra  vires  increase  of  stock). 

2  Harriman,  "Contracts,"  §  240. 

3  See  4th  ed.,  p.  200.     "If  A  gives  X  £1000  in  consideration  of  X 
undertaldng  to  blow  up  Westminster  Abbey  or  to  write  and  publish  a 
series  of  defamatory  notices  of  M,  it  is  assumed  that  A  could  not  recover 
that  money  though  at  the  end  of  six  months  Westminster  Abbey  was 
unharmed  or  the  notices  unwritten,  and  though  X  had  the  money  at 
his  bankers.     But  if  A  were  to  place  £1000  to  the  account  of  X  with  a 
banker  in  order  that  X  might  buy  dynamite  to  blow  up  Westminster 
Abbey,  or  purchase  a  share  in  the  management  of  a  newspaper  with  a 

228 


Chap.  VIII]  PLAINTIFF  WITHDRAWS  [§  146 

but  in  the  later  editions  of  the  book  the  point  is  not  touched  upon.1 
The  distinction,  it  is  believed,  is  not  well  taken.  It  is  true 
that  one's  intent  to  commit  an  offense  against  the  law  is  more 
likely  to  be  forestalled  by  depriving  him  of  the  means  of 
committing  it  than  merely  by  requiring  the  return  of  the  con- 
sideration received  by  him.  But  it  is  not  true  that  to  require 
the  return  of  the  consideration  "  would  tend  to  induce  the  recip- 
ient of  the  money  to  commit  the  crime,  and  thereby  insure  the 
retention  of  the  money."  For  the  rule  is  not  that  the  consum- 
mation of  the  illegal  purpose  before  judgment  of  restitution, 
or  before  the  commencement  of  the  action,  will  defeat  a  recovery. 
The  right  to  restitution  arises  at  the  instant  of  rescission,  and 
the  subsequent  commission  of  the  contemplated  offense  by  the 
other  party  will  not  "  insure  the  retention  of  the  money." 
It  may  be  argued  that  knowledge  of  the  doctrine  and  the  con- 
sequent fear  of  rescission  may  lead  the  recipient  of  the  money 
or  goods  to  secure  himself  by  hastening  to  perform  his  unlawful 
undertaking  before  the  other  party  repents.  But  if  the  right 
to  restitution  is  denied,  the  recipient  of  the  money  or  goods 
may  carry  out  the  illegal  transaction  at  his  leisure.  Moreover, 
this  consideration  is  offset  by  another  of  equal  importance  — 
that  such  knowledge  of  the  doctrine  and  consequent  fear  of 
rescission  tends  to  prevent  the  formation  of  illegal  contracts. 

It  is  submitted,  therefore,  that  while  the  doctrine  is  in  no 
case  certain  to  avert  the  violation  of  law,  it  tends  so  to  do; 
and  that  this  is  true  in  the  case  of  money  or  goods  furnished 
in  consideration  of  an  unlawful  undertaking  as  well  as  in  that  of 
money  or  goods  furnished  as  a  means  of  affecting  an  unlawful  end. 

§  146.  Same :  Illegal  purpose  accomplished  in  part.  —  The 
accomplishment  of  any  part  of  the  illegal  purpose,  it  seems, 
effectively  cuts  off  the  right  to  recover : 

view  to  the  defamation  of  M ;  and  if  A  changed  his  mind  before  the 
execution  of  the  contract,  it  is  presumed  that  he  might  recover  so  much 
of  the  £1000  as  had  not  been  spent  on  the  illegal  objects  contemplated. 
To  allow  an  action  to  be  brought  on  the  first  of  these  cases  would  tend 
'to  enforce  the  illegal  transaction,'  in  the  second  case  it  would  tend  to 
prevent  the  illegal  object  from  being  carried  out." 
1  See  Huff  cut's  2d  Am.  copyright  ed.,  pp.  266,  267. 

229 


§  146]  MISRELIANCE  ON  ILLEGAL  CONTRACT  [Part  I 

Kearley  v.  Thomson,  1890,  24  Q.  B.  D.  742 :  Action  to  recover 
money  paid  by  the  plaintiff,  a  friend  of  a  bankrupt,  to  the 
defendants,  solicitors  of  the  petitioning  creditor,  on  their 
undertaking  not  to  appear  at  the  public  examination  of  the 
bankrupt,  and  not  to  oppose  his  discharge.  FRY,  L.J.  (p.  746) : 
"  What  is  the  condition  of  things  if  the  illegal  purpose  has  been 
carried  into  effect  in  a  material  part  but  remains  unperformed 
in  another  material  part  ?  As  I  have  already  pointed  out  in 
the  present  case,  the  contract  was  that  the  defendants  should 
not  appear  at  the  public  examination  of  the  bankrupt  or  at  the 
application  for  an  order  of  discharge.  It  was  performed  as 
regards  the  first ;  but  the  other  application  has  not  yet  been 
made.  Can  it  be  contended  that,  if  the  illegal  contract  has  been 
partly  carried  into  effect  and  partly  remains  unperformed, 
the  money  can  still  be  recovered  ?  In  my  judgment  it  cannot 
be  so  contended  with  success.  Let  me  put  an  illustration  of 
the  doctrine  contended  for,  which  was  that  partial  performance 
did  not  prevent  the  recovery  of  the  money.  Suppose  a  payment 
of  £100,  by  A  to  B  on  a  contract  that  the  latter  shall  murder  C 
and  D.  He  has  murdered  C,  but  not  D.  Can  the  money  be 
recovered  back?  In  my  opinion  it  cannot  be.  I  think  that 
case  illustrates  and  determines  the  present  one." 

Ullman  v.  St.  Louis  Fair  Assn.,  1902,  167  Mo.  273 ;  66  S.  W. 
949 ;  56  L.  R.  A.  606 :  Action  to  recover  money  paid  under  an 
illegal  contract  for  the  purchase  of  betting  privileges  at  a  race 
track.  The  plaintiffs  enjoyed  for  a  short  time  the  privileges 
purchased  by  them.  GANTT,  J.  (p.  287) :  "  It  is  only  when  the 
contract  remains  wholly  unexecuted  on  one  side,  and  where, 
by  its  abandonment,  the  acts  which  the  law  forbids  will  be 
averted,  that  the  courts  will  lend  a  willing  ear  to  the  repentant 
party,  and  if  he  has  paid  money  in  advance,  will  permit  its 
recovery ;  but  when,  as  in  this  case,  he  has  carried  into  effect 
the  unlawful  design,  and  in  part,  at  least,  violated  the  law  in 
furtherance  of  such  contract,  the  time  for  repentance  has  passed 
in  which  the  law  will  let  him  recover  moneys  which  he  has  em- 
barked in  the  enterprise."  * 

1  Also :  Arnot  v.  Pittston,  etc.,  Co.,  1877,  68  N.  Y.  558 ;  23  Am.  Rep. 
190,  (agreement  to  bull  the  market) ;  Edwards  v.  Goldsboro,  1906,  141 
N.  C.  60 ;  53  S.  E.  652 ;  4  L.  R.  A.  (N.  S.)  589,  (A  city  made  an  illegal 
contract  with  certain  property  owners,  whereby  a  city  hall  and  market 

230 


Chap.  VIII]  PLAINTIFF   WITHDRAWS  [§  147 

The  wisdom  of  this  limitation  may  be  doubted.  The  court, 
it  is  true,  may  not  hope  altogether  to  avert  the  violation  of 
law  by  allowing  a  withdrawal  and  recovery  after  the  illegal 
purpose  has  been  in  part  accomplished,  but  it  may  hope  to 
avert  a  renewal  or  continuation  of  the  violation  of  law,  whereas 
to  deny  a  recovery  would  tend  to  have  the  opposite  effect. 
There  are  a  few  cases  in  which  the  limitation  is  disregarded.1 

§  147.  Same  :  Illegal  purpose  thwarted.  —  A  recovery  will 
not  be  permitted,  even  though  no  part  of  the  illegal  purpose 
has  been  accomplished,  if  it  appears  that  by  reason  of  the  in- 
tervention of  the  authorities  or  the  action  of  a  third  person 
the  accomplishment  of  the  illegal  purpose  is  impossible : 

Shattuck  v.  Watsvn,  1890,  53  Ark.  147 ;  13  S.  W.  516 ;  7  L. 
R.  A.  551 :  Suit  to  cancel  mortgages  given  by  a  father  in  con- 
sideration of  a  promise  not  to  prosecute  his  son  for  forgery. 
The  son  was  prosecuted  through  other  agencies.  HEMINGWAY, 
J.  (p.  152) :  "But  conceding  that  there  was  a  time  when  the 
appellee  might  have  withdrawn  from  his  illegal  compact,  re- 
moved the  obstacle  he  had  placed  in  the  way  of  justice  and  re- 
covered the  securities,  he  never  sought  to  do  it,  until  the  illegal 
purpose  failed  from  other  causes,  and  his  agreement  no  longer 
thwarted  justice." 

This  brings  out,  in  clear  relief,  the  object  of  the  rule  of  locus 
poenitentice.  It  is  not  to  aid  the  penitent,  but  to  avert,  if 
possible,  the  violation  of  law.  Where  it  is  found  that  the 
parties  are  helpless  to  execute  their  unlawful  plans,  the  court 
ceases  to  concern  itself  with  the  matter. 

house  were  to  be  erected  by  the  city.  The  city  erected  the  city  hall 
but  not  the  market  house.  Held :  the  property  owners  could  not 
recover  money  paid  under  the  contract.) ;  Hooker  v.  De  Palos,  1876, 
28  Ohio  St.  251,  (land  lottery) ;  Sauerhering  v.  Rueping,  1909,  137  Wis. 
407  ;  119  N.  W.  184,  187,  (ultra  vires  contract  of  corporation).  And  see 
St.  Louis,  etc.,  R.  Co.  v.  Terre  Haute,  etc.,  R.  Co.,  1892,  145  U.  S.  393, 
407  ;  12  S.  Ct.  953,  (ultra  vires  lease). 

1  Block  v.  Darling,  1890, 140  U.  S.  234 ;  11  S.  Ct.  832,  (deposit  in  fraud 
of  creditors).  And  see  cases  cited,  post,  §  148,  holding  that,  although 
part  of  a  sum  of  money  paid  by  a  principal  to  his  agent  to  be  used  for 
an  illegal  purpose  has  actually  been  expended  by  the  agent  in  fur- 
therance of  the  illegal  purpose,  the  balance  may  be  recovered. 

231 


§  148]  MISRELIANCE  ON  ILLEGAL  CONTRACT  [Part  I 

§  148.  (Ill)  Illegal  transactions  by  agent :  Rights  of  principal. 
-  Money  paid  by  a  principal  to  his  agent  to  be  used  in 
violation  of  law,  and  remaining  in  the  agent's  hands,  may  be 
recovered.1  Even  if  part  of  the  money  has  been  paid  over  or 
expended  by  the  agent  in  furtherance  or  accomplishment  of 
the  illegal  purpose  the  balance  is  recoverable.2  Indeed,  there 
are  many  cases  which  go  to  the  extent  of  holding  the  agent 
responsible  to  his  principal  for  money  received  by  him  from  a 
third  person  as  the  proceeds  of  an  executed  illegal  contract.3 

1  Wasserman  v.  Sloss,  1897,  117  Cal.  425;  49  Pac.  566;  38  L.  R.  A. 
176;  59  Am.  St.  Rep.  209,  (stocks  advanced  for  bribery);   Morgan  v. 
Groflf,  1848,  4  Barb.  (N.  Y.  Sup.  Ct.)  524,  (money  given  agent  to  bet  and 
misappropriated) ;  Smith  v.  Blackley,  1898,  188  Pa.  St.  550 ;  41  Atl.  619 ; 
68  Am.  St.  Rep.  887,  (alleged  abortion :  here  the  principals  were  not 
in  pari  delicto  with  their  agent,  being  induced  to  employ  him  in  the  pro- 
posed illegal  transaction  by  his  false  and  fraudulent  representations) ; 
Kiewert  v.  Rindskopf,  1879,  46  Wis.  481 ;  1  N.  W.  163,  (money  given 
agent  to  make  payment  on  illegal   contract).       But  see    Smith   v. 
Richmond,  1902,  114  Ky.  303;  70  S.  W.  846;   102  Am.  St.  Rep.  283, 
(bribery). 

2  Bone  v.  Ekless,  1860,  5  Hurl.  &  Nor.  925,  (bribe) ;  Benton  v.  Single- 
ton, 1902,  114  Ga.  548 ;  40  S.  E.  811 ;  58  L.  R.  A.  181,  (cotton  on  mar- 
gin) ;  Hardy  v.  Jones,  1901,  63  Kan.  8;   64  Pac.  969;  88  Am  St.  Rep. 
223,  (suppressing  competition  at   sale) ;  Ware  v.    Spinney,    1907,    76 
Kan.  289 ;  91  Pac.  787 ;   13  L.  R.  A.  (N.  S.)  267,  (inducing  violation  of 
trust) ;   Sampson   v.  Shaw,  1869,    101    Mass.  145 ;    3  Am.  Rep.    327, 
(corner  in  stock) ;    Peters  ».  Grim,  1892,  149  Pa.  St.  163  ;   24  Atl.  192 ; 
34  Am.  St.  Rep.  599,  (stock  on  margin). 

3  Tenant  v.  Elliott,  1797,  1  Bos.  &  Pul.  3,  (insurance  money  on  foreign 
ship) ;  McMullen  v.  Hoffman,  1899,  174  U.  S.  639;  19  S.  Ct.839,  (sup- 
pressing competition  at  sale) ;  Caldwell  v.  Harding,  1869,  1  Low.  (U.  S. 
C.  C.)  326 ;  Fed.  Cas.,  No.  2302,  (insurance  on  enemy's  vessel) ;  First 
Nat.  Bank  v.  Leppel,  1886,  9  Colo.  594 ;  13  Pac.  776,  (note  in  fraud  of 
creditors) ;  Brady  v.  Horvath,  1897,  167  111.  610 ;  47  N.  E.  757,  (lottery) ; 
Wilt  v.  Town  of  Redkey,  1902,  29  Ind.  App.  199;  64  N.  E.  228,  (illegal 
sale  of  municipal  bonds) ;  Willson  v.  Owen,  1874,  30  Mich.  474,    (horse 
racing) ;   Gilliam  v.  Brown,  1870-71,  1  Morris  (43  Miss.)  641,  (trade 
with  enemy) ;  Roselle  v.  Beckemeir,  1896,  134  Mo.  380;  35  S.  W.  1132, 
(proceeds  of  lottery  ticket) ;  Evans  v.  Trenton,  1853,  24  N.  J.  L.  764, 
(municipal  funds  raised  illegally) ;   Norton  v.  Blinn,  1883,  39  Ohio  St. 
145,  (futures) ;   Hertzler  v.  Geigley,  1900,  196  Pa.  St.  419  ;  46  Atl.  366 ; 
79  Am.  St.  Rep.  724,  (illegal  sale  of  liquor) ;  Monongahela  Nat.  Bank  v. 
First  Nat.  Bank,  1910,  226  Pa.  St.  270 ;  75  Atl.  359,  (fraud) ;  Tate  v. 
Pegues,  1887,  28  S.  C.  463,  (untagged  fertilizer) ;    Baldwin  ».  Patter, 
1874,  46  Vt.  402,  (boxes  of  candy  containing  prizes) ;  Cheuvront  v. 

232 


Chap.  VIII]      ILLEGAL   TRANSACTIONS   BY   AGENT  [§  148 

In  support  of  this  last  rule  it  is  sometimes  argued  that  since 
the  action  is  based  upon  the  receipt  by  the  agent  of  money 
belonging  to  his  principal,  the  illegality  of  the  contract  is  irrel- 
evant. If  this  is  the  true  ground  of  recovery,  the  rule  applies 
to  the  case  of  a  contract  malum  in  se  as  well  as  to  that  of  a 
contract  malum  prohibitum.  Another  reason,  though  one  not 
often  clearly  expressed,  is  that  the  policy  of  requiring  of  an 
agent  the  strictest  fidelity  to  the  interests  of  his  principal 
outweighs  that  of  denying  relief  to  a  participant  in  an  illegal 
transaction.  As  was  said  by  MC!LVAINE,  J.,  in  Norton  v. 
Blinn:1 

"It  is  contrary  to  public  policy  and  good  morals,  to  permit 
employees,  agents  or  servants  to  seize  or  retain  property  of 
their  principal,  although  it  may  be  employed  in  illegal  business 
and  under  their  control.  No  consideration  of  public  policy 
can  justify  a  lowering  of  the  standard  of  moral  honesty  re- 
quired of  persons  in  these  relations." 

In  some  cases,  a  distinction  is  made  between  a  case  in  which 
the  illegal  business  is  transacted  by  the  defendant  agent  and 
one  in  which  such  agent  is  not  a  participant  in  the  illegal  trans- 
action, but  is  merely  a  channel  through  which  the  proceeds  are 
to  be  delivered  to  the  principal.  In  the  former,  it  is  argued, 
the  payment  over  of  the  money  collected  by  the  agent  is  an 
inseparable  part  of  the  unlawful  undertaking,  and  therefore 
to  compel  such  payment  over  would  be  practically  to  enforce 
the  performance  of  an  illegal  contract,  while  in  the  latter  the 
illegal  transaction  is  completely  executed  when  the  money 
reaches  the  agent's  hands  and  there  is  consequently  no  object 
in  denying  a  recovery  against  him : 

Homer,  1907,  62  W.  Va.  476;  59  S.  E.  964,  (fraudulent  conveyance) ; 
Kurd  v.  Doty,  1893,  86  Wis.  1 ;  56  N.  W.  371 ;  21  L.  R.  A.  746,  (insur- 
ance money  on  life  in  which  plaintiff  had  no  interest).  See  Ruem- 
meli  v.  Cravens,  1903,  13  Okl.  342 ;  74  Pac.  908,  (sale  of  liquor). 

1  1883,  39  Ohio  St.  145,  149.  See  also  Lovejoy  v.  Kaufman,  1897, 
16  Tex.  Civ.  App.  377;  41  S.  W.  507,  in  which  the  court  said:  "The 
illegality  of  the  contract  ...  in  no  wise  lessens  his  responsibility  aa 
agent.'' 

233* 


MISRELIANCE  ON  ILLEGAL  CONTRACT  [Part  I 

Lemon  v.  Grosskopf,  1868,  22  Wis.  447;  99  Am.  Dec.  58: 
Action  to  recover  from  an  agent  the  proceeds  of  the  sale  of  tickets 
in  a  lottery  scheme.  Some  of  the  tickets  had  been  sold  by  the 
defendant  and  the  remainder  by  Kilgore,  another  agent  of  the 
plaintiff,  who  had  turned  over  to  the  defendant  the  money 
collected  by  him.  COLE,  J.  (p.  452) :  "  Here  the  defendant  was 
employed  by  the  plaintiff  to  sell  these  lottery  tickets,  receive 
and  retain  the  money  from  them  until  he  became  satisfied  that 
the  drawing  of  the  prizes  in  the  scheme  was  fairly  conducted, 
and  then  account  to  the  plaintiff.  It  was  as  well  a  part  of  his 
agency  to  receive  and  account  for  the  money,  as  to  sell  the 
tickets.  And  an  action  to  recover  this  money  goes  in  affirmance 
of  the  illegal  contract,  and  to  enforce  the  performance  of  this 
duty.  .  .  .  But  the  money  which  the  defendant  received 
from  Kilgore  stands  upon  different  grounds.  So  far  as  that 
money  was  concerned,  it  seems  to  us  that  it  stands  precisely 
upon  the  same  ground  it  would,  had  Kilgore  delivered  the 
money  to  some  stranger,  or  to  an  express  company,  to  transmit 
it  to  the  plaintiff.  It  is  disconnected  with  the  illegal  transaction 
and  is  not  affected  by  it."  1 

L§  149.  (IV)  niegal  transaction  by  partner :  Rights  of  copartner. 
-  A  question  similar  to  that  considered  in  the  preceding  section 
frequently  arises  in  cases  of  illegal  partnerships.  As  early  as 
in  1725,  in  the  famous  case  of  Everet  v.  Williams,2  a  bill  for  an 
accounting  between  two  gentlemen  engaged  as  partners  in  the 
profession  of  highway  robbery  was  declared  scandalous  and 
impertinent.  But  in  Sharp  v.  Taylor,3  it  was  held  that  a  partner 
cannot  escape  his  obligation  to  account  for  profits  by  showing 
that  in  realizing  them  a  statute  was  violated.  "  The  transaction 
alleged  to  be  illegal,"  said  the  court,4  "  is  completed  and  closed 
and  will  not  be  in  any  manner  affected."  This  case  has  had 

1  See  also  Caldwell ».  Harding,  1869,  1  Low.  (U.  S.  C.  C.  )  326,  330 ; 
Fed.  Gas.,  No.  2,  302  ;  McMullen  v.  Hoffman,  1899,  174  U.  S.  639,  660 ; 
19  S.  Ct.  839.     In  many  of  the  cases  in  which  a  recovery  is  allowed,  the 
defendant  was  not  employed  in  making  the  illegal  contract  but  was  an 
agent  for  the  collection  of  proceeds  only. 

2  Commonly  called  the  Highwayman's  Case,  Exch.,   1725,  9  Law 
Quart.  Rev.  197;  2  Evans'  Pothier  on  "Obligations,"  3,  n.  1 ;  Lindley, 
{'Partnership,"  7th  Eng.  ed.,  107. 

3 1849,  2  Ph.  Ch.  801,  (violation  of  registry  laws).          4  At  page  818. 

234 


Chap.  VIII]  NECESSITY   OF   DEMAND  [§  150 

some  following  in  America,1  but  it  was  severely  criticized  in  the 
later  English  case  of  Sykes  v.  Beadon,2  and  its  doctrine  appears 
to  be  repudiated  by  the  weight  of  American  authority.3  Appar- 
ently, the  courts  in  most  jurisdictions  have  not  felt,  in  the  cases 
of  illegal  partnerships  or  illegal  transactions  by  partners,  that 
the  importance  of  requiring  fidelity  between  fiduciaries  is  greater 
than  that  of  denying  relief  to  lawbreakers. 

§  150.  (V)  Necessity  of  demand:  Statute  of  limitations: 
Interest.  —  Since  the  obligation  in  quasi  contract  arises  as 
soon  as  the  recipient  of  the  benefit  learns  that  he  ought  to  make 
restitution  (ante,  §  32),  one  who  refuses  to  perform  an  illegal 
contract  but  who  nevertheless  retains  the  benefit  of  the  other 

1  See  Brooks  v.  Martin,  1863,  2  Wall.  (U.  S.)  70,  (buying  soldiers' 
claims  for  land  warrants  :  virtually  overruled  by  McMullen  v.  Hoffman, 
174  U.  S.  639,  668 ;   19  S.  Ct.  839) ;    Mitchell  v.  Fish,  1911,       Ark.       ; 
134  S.  W.  940  ;  Willson  ».  Owen,  1874,  30  Mich.  474,  (racing) ;  Gilliam 
v.  Brown,  1870-71,  1  Morris  (43  Miss.)  641 ;  Pfeuffer  v.  Maltby,  1881, 
54  Tex.  454;  38  Am.  Rep.  631,  (illegal  traffic  during  war) ;  McDonald 
v.  Lund,  1896,  13  Wash.  412  ;  43  Pac.  348,  (faro  and  crap  games). 

2  1879,  11  Ch.  Div.  170,  196,  (Association  in  violation  of  the  Compa- 
nies Act,  1862.    "It  is  not  sufficient,"  says  JESSEL,  M.R.,  "to  say  that 
the  transaction  is  concluded  as  a  reason  for  the  interference  of  the 
Court.     If  that  were  the  reason,  it  would  be  lending  the  aid  of  the 
Court  to  assert  the  rights  of  the  parties  in  carrying  out  and  completing 
an  illegal  contract.  ...     It  is  no  part  of  the  duty  of  a  Court  of  Justice 
to  aid  either  in  carrying  out  an  illegal  contract,  or  in  dividing  the  pro- 
ceeds arising  from  an  illegal  contract,  between  the  parties  to  that  illegal 
contract."). 

3  Bartle  v.  Nutt,  1830,  4  Pet.  (U.  S.)  184,  (defrauding  government  in 
building  contract) ;  Chateau  v.  Singla,  1896,  114  Cal.  91 ;  45  Pae.  1015 ; 
33  L.  R.  A.  750 ;  55  Am.  St.  Rep.  63,  (letting  for  prostitution) ;  Craft  v. 
McConoughy,  1875,  79  111.  346;    22  Am.  Rep.  171,  (combination  in 
restraint  of  trade) ;   Smith  v.  Richmond,  1902  ;   114  Ky.  303 ;  70  S.  W. 
846;   102  Am.  St.  Rep.  283,  (bribery) ;  Martin  v.  Seabaugh,  1911,  128 
La.        ;   54  So.  935,  (partnership  to  conduct  gambling)  ;   Jackson  v. 
McLean,  1890,  100  Mo.  130 ;    13  S.  W.  393,  (construction  contract) ; 
Morrison  v.  Bennett,  1898,  20  Mont.  560 ;  52  Pac.  553  ;  40  L.  R.  A.  158, 
(fake  horse  race) ;  Woodworth  v.  Bennett,  1871,  43  N.  Y.  273 ;  3  Am. 
Rep.  706,  (illegal  bidding  agreement) ;   Vandegrift  v.  Vandegrift,  1910, 
226  Pa.  St.  254 ;    75  Atl.  365,  (liquor) ;  Wiggins  v.  Bisso,  1898,  92  Tex. 
219 ;  47  S.  W.  637 ;  71  Am.  St.  Rep.  837,  (combination  in  restraint  of 
trade) ;  Atwater  v.  Manville,  1900,  106  Wis.  64 ;  81  N.  W.  985,  (grain  on 
margin).       See,   for  additional  cases,   Wald's   Pollock,    " Contracts" 
(Williston's  ed.),  500. 

235 


§  150]  MISRELIANCE  ON  ILLEGAL  CONTRACT  [Part  I 

party's  performance  is  obviously  not  entitled  to  notice  or  demand 
before  suit.1  But  it  has  been  contended  that  one  who  has  not 
refused  to  perform  should  not  be  sued  until  he  has  been  notified 
of  the  determination  of  the  other  party  to  withdraw  from  the 
illegal  transaction  and  to  have  back  that  which  he  has  given, 
or  its  value.  "  Why,"  says  Professor  Keener,  "  should  one 
who  has  not  refused  to  do  that  which  the  plaintiff  stipulated 
for,  be  liable  to  an  action  for  not  doing  something  else  which 
he  had  no  reason  to  suppose  the  plaintiff  desired  him  to  do?  " 
In  answer  it  may  be  pointed  out  that  an  illegal  contract  is  not 
voidable  merely ;  that  one  ought  not  to  accept  a  benefit  under 
it;  and  that  having  accepted  a  benefit  under  it  one  is  under 
a  moral  duty,  regardless  of  what  he  supposes  to  be  the  desire 
of  the  other  party,  to  refuse  to  carry  out  his  engagement  and 
to  tender  a  return  of  that  which  he  has  received.  It  has  been 
held,  accordingly,  that  a  demand  is  not  a  prerequisite  to  the 
commencement  of  an  action  for  restitution.3  This  rule  works  no 
hardship  where  the  recipient  of  the  benefit  is  aware  of  the  illegal- 
ity of  the  contract,  or  is  chargeable  with  notice  of  its  illegality. 
For  example,  a  corporation,  since  it  is  chargeable  with  notice  of 
the  extent  of  its  lawful  powers,  is  not  entitled  to  a  demand  before 
being  sued  for  money  paid  to  it  under  an  ultra  vires  contract.4 
Where  the  recipient  of  the  benefit,  on  the  other  hand,  is  ignorant 
of  the  unlawful  character  of  the  contract  and  is  not  chargeable 
with  knowledge,  a  demand  ought  in  fairness  to  be  made. 

Where  demand  is  not  a  prerequisite  to  the  commencement  of 
an  action  for  the  recovery  of  money  paid  under  an  illegal  con- 
tract, interest  should  be  allowed  from  the  day  of  the  receipt 
of  the  money  by  the  defendant  (ante,  §  34)  ,6  and  the  statute  of 
limitations  should  run  from  that  date  (ante,  §  33). 

1  See  Dill  v.  Wareham,  1844,  7  Met.  (Mass.)  438,  (ultra  vires  con- 
tract of  town). 

2  "Quasi-Contracts,"  p.  266. 

3  White  v.  Franklin   Bank,  1839,   22  Pick.  (Mass.)  181,  (ultra  vires 
contract  of  bank  with  depositor). 

4  See  Dill  v.  Wareham,  1844,  7  Met.  (Mass.)  438. 

5  But  see   Brennan  v.  Gallagher,  1902,  199  111.  207 ;   65  N.  E.  227, 
(ultra  vires  contract  of  a  building  and  loan  association) . 

236 


Chap.  VIII]         MARRIAGE    BROKAGE    CONTRACTS  [§  151 

§  151.  (VI)  Certain  contracts  separately  considered.  (1)  Mar- 
riage brokage  contracts.  —  In  the  early  case  of  Smith  v.  Brun- 
ing,1  the  Master  of  the  Rolls,  in  ordering  a  marriage  brokage 
bond  to  be  given  up,  decreed  that  the  sum  of  fifty  guineas 
paid  to  one  of  the  defendants  be  refunded.  And  in  two  com- 
paratively recent  cases,  one  decided  in  England  and  the  other 
in  New  York,  it  is  held  that  money  paid  by  a  woman  to  the 
proprietor  of  a  "  matrimonial  bureau  "  under  an  illegal  con- 
tract to  introduce  men  to  her  with  a  view  to  matrimony,  may 
be  recovered.  But  the  two  courts  do  not  assign  the  same 
reason  for  their  conclusion.  In  Hermann  v.  Charlesworth,2 
the  English  case,  there  is  no  suggestion  that  the  parties  were 
not  in  pari  delicto,  and  the  court  rests  its  decision,  apparently, 
upon  the  ground  that  the  plaintiff  withdrew  from  the  transaction 
before  its  illegal  purpose  was  accomplished.  In  Duval  v. 
Wellman,3  the  New  York  case,  on  the  other  hand,  it  is  declared 
that  the  plaintiff  was  not  in  pari  delicto,  —  or,  at  least,  that 
there  was  sufficient  evidence  to  justify  the  jury  in  so  finding. 
Said  the  court : 

"It  is  true  there  is  no  evidence  of  actual  overpersuasion  or 
undue  influence.  But  at  most  the  inferences  to  be  drawn  from 
these  facts  were  for  the  jury.  The  prominent  fact  in  the  case 
is  that  such  a  place  as  the  defendant  maintained  existed  in  the 
community  with  its  evil  surroundings  and  immoral  tendencies. 
What  influence  was  exerted  upon  the  mind  of  the  widow  by  the 
mere  fact  of  the  existence  of  such  a  place  to  which  resort  could 
be  had,  cannot  of  course  appear  except  by  inference.  But 
if  the  evidence  was  not  sufficiently  strong  to  authorize  the  court 
to  hold  as  a  question  of  law  that  the  parties  were  not  in  pari 
delicto  it  at  least  presented  a  question  of  mixed  fact  and  law  for 
the  jury." 

To  infer  actual  fraud  or  undue  influence  over  a  woman  who 
desires  a  husband  from  the  mere  fact  that  she  has  dealt  with 

1  1700,  2  Vern.  392 ;  also  reported  under  the  title  of  Goldsmith  v. 
Bruning,  in  1  Eq.  Gas.  Abr.  90. 

*  [1905]  2  K.  B.  123. 

*  1891,  124  N.  Y.  156,  163 ;  26  N.  E.  34a 

237 


§  151]  MISRELIANCE  ON  ILLEGAL  CONTRACT  [Part  I 

the  proprietor  of  a  "  matrimonal  bureau  "  seems  hardly  justifi- 
able. But  it  is  not  unreasonable  that  credulous  and  weak- 
minded  persons  should  be  protected  by  law  from  the  tempting 
representations  of  marriage  brokers,  and  there  is  reason  to 
believe  that  such  is  one  of  the  purposes  of  the  doctrine  which 
makes  marriage  brokage  contracts  illegal.  "  Every  tempta- 
tion," said  Story,1  in  expounding  the  doctrine,  "  to  the  exercise 
of  an  undue  influence  or  a  seductive  interest  in  procuring  a 
marriage,  should  be  suppressed;  since  there  is  infinite  danger 
that  it  may,  under  the  disguise  of  friendship,  confidence, 
flattery,  or  falsehood,  accomplish  the  ruin  of  the  hopes  and 
fortunes  of  most  deserving  persons,  especially  of  females."  2 

If,  then,  the  purpose,  or  one  of  the  chief  purposes,  of  the  pro- 
hibition is  the  protection  of  a  class  of  persons  represented  by 
the  plaintiff  from  a  class  represented  by  the  defendant,  it  follows 
that  the  plaintiff  is  not  in  pari  delicto,  even  though  no  actual 
fraud  or  constraint  is  established.  That  this  is  the  underlying 
reason  for  the  decision  in  Duval  v.  Wellman  is  suggested  in  one 
paragraph  of  the  opinion,  as  follows : 3 

"But  where  a  party  carries  on  a  business  of  promoting  mar- 
riage as  the  defendant  appears  to  have  done,  it  is  plain  to  be 
seen  that  the  natural  tendency  of  such  a  business  is  immoral 
and  it  would  be  so  clearly  the  policy  of  the  law  to  suppress  it 
and  public  interest  would  be  so  greatly  promoted  by  its  sup- 
pression, that  there  would  be  no  hesitation  upon  the  part  of  the 
courts  to  aid  the  party  who  had  patronized  such  a  business 
by  relieving  him  or  her  from  all  contracts  made,  and  grant  res- 
titution of  any  money  paid  or  property  transferred." 

It  should  be  noted,  in  conclusion,  that  the  theory  of  Duval  v. 
Wellman  might  be  held  to  have  no  application  if  the  defendant 
were  not  the  proprietor  of  a  "  matrimonal  bureau,"  4  or  a  pro- 

1  "Equity  Jurisprudence,"  §  261. 

2  See  also  Drury  v.  Hooke,  1686,  1  Vern.  412 ;  Crawford  v.  Russell, 
1872,  62  Barb.  (N.  Y.  Sup.  Ct.)  92. 

3  At  page  162. 

4  But  see,  contra,  Wenninger  v.  Mitchell,  1909,  139  Mo.  App.  420 ; 
122  S.  W.  1130. 

238 


Chap.  VIII]  WAGERING   CONTRACTS  [§  152 

fessional  marriage  broker,  while  the  grounds  adopted  in  Her- 
mann v.  Charlesworth  would  support  a  decision  against  one  who 
did  not  hold  himself  out  as  a  promoter  of  marriages,  as  well 
as  against  a  professional  broker. 

§  152.  (2)  Wagering  contracts.  —  In  general,  wagers  were  not 
regarded  by  the  English  courts  as  illegal  or  unenforceable  at 
common  law.1  Some  American  courts  have  taken  the  same 
view.2  As  a  result,  however,  of  the  steady  growth  of  public 
sentiment  against  gambling,  wagers  are  now  void  by  statute  in 
England,3  and  illegal,  either  by  statute  or  judicial  decision, 
in  most  American  States.4  In  many  jurisdictions  the  statute 
permits  the  recovery  of  money  from  the  stakeholder  5  or  the 
winner ; 6  and  even  in  the  absence  of  a  statute  it  is  generally 

1  Good  v.  Elliot,  1790,  3  Term  R.  693. 

2  Johnson  v.  Fall,  1856,  6  Cal.  359 ;    65  Am.  Dec.  518 ;    Dewees  v. 
Miller,  1851,  5  Harring.   (Del.)  347;    Beadles  v.  Bless,  1862,  27  111. 
320 ;    81  Am.  Dec.  231 ;    Flagg  ».  Baldwin,  1884,  38  N.  J.  Eq.  219, 
223;    48  Am.  Rep.  308;    Campbell  v.  Richardson,   1813,   10  Johns. 
(N.  Y.)  406;    Harris  v.  White,  1880,  81  N.  Y.  532,  544;    McElroy  v. 
Carmichael,  1851,  6  Tex.  454. 

3  Gaming  Act,  1845,  s.  18  (8  &  9  Viet.  c.  109) ;   Gaming  Act,  1892 
(55  Viet.  c.  9). 

4  Eldred  v.  Malloy,  1874,  2  Colo.  320 ;  25  Am.  Rep.  752,  (decision) ; 
Wheeler  v.  Spencer,  1842,  15  Conn.  28,  (statute) ;  Cleveland  v.  Wolff, 
1871,  7  Kan.  184,  (decision) ;  Stacy  v.  Foss,  1841,  19  Me.  335 ;  36  Am. 
Dec.  755,  (decision) ;  Love  v.  Harvey,  1873,  114  Mass.  80,  (decision) ; 
Wilkinson  v.  Tousley,  1871,  16  Minn.  299  ;  10  Am.  Rep.  139,  (decision)  ; 
Perkins  v.  Eaton,  1825,  3  N.  H.  152,   (decision) ;  Bernard  v.  Taylor, 
1893,  23  Or.  416 ;  31  Pac.  968 ;   18  L.  R.  A.  859 ;  37  Am.  St.  Rep.  693, 
(decision  and  statute) ;   Edgell  v.  McLaughlin,  1841,  6  Whar.  (Pa.)  176  ; 
36  Am.  Dec.  214,  (decision) ;'  Flagg  v.  Gilpin,  1890,  17  R.  I.  10 ;   19 
Atl.  1084,  (decision) ;  Collamer  v.  Day,  1829,  2  Vt.  144,  (decision  and 
statute). 

5Hutchings  &  Co.  v.  Stilwell,  1857,  18  B.  Mon.  (57  Ky.)  776; 
Hensler  v,  Jennings,  1898,  62  N.  J.  L.  209 ;  41  Atl.  918 ;  Van  Pelt  v. 
Schauble,  1903,  68  N.  J.  L.  638,  54  Atl.  437;  French  v.  Matteson, 
1901,  69  N.  Y.  Supp.  869;  34  Misc.  Rep.  425;  Simmons  v.  Bradley, 
1871,  27  Wis.  689. 

6  Quillian  v.  Johnson,  1905,  122  Ga.  49;  49  S.  E.  801 ;  Desgain  v. 
Wessner,  1903,  161  Ind.  205;  67  N.  E.  991 ;  Grace  ».  McElroy,  1861, 
1  Allen  (Mass.)  563 ;  Gofer  v.  Riseling,  1900,  153  Mo.  633 ;  55  S.  W. 
235 ;  Watts  v.  Lynch,  1886,  64  N.  H.  96 ;  5  Atl.  458 ;  Meech  v.  Stoner, 
1859,  19  N.  Y.  26;  Mitchell  v.  Orr,  1901,  107  Tenn.  534;  64  S.  W. 
476. 

239 


§  152]  MISRELIANCE  ON  ILLEGAL  CONTRACT  [Part  I 

held  that  so  long  as  the  money  remains  in  the  hands  of  the 
stakeholder  and  the  unlawful  transaction  is  therefore  not  con- 
summated, the  door  of  repentance  is  open : 

Stacy  v.  Foss,  1841,  19  Me.  335 ;  36  Am.  Dec.  755 :  Assumpsit 
to  recover  money  deposited  with  the  defendant  as  stakeholder 
of  a  wager  on  a  horse  trot.  WESTON,  C.J.  (p.  337) :  "When 
the  money  has  once  been  paid  over  to  the  winner,  unless  where 
made  recoverable  by  statute,  the  parties  being  clearly  in  pari 
dclicto,  no  action  can  be  maintained  to  recover  it  back.  But 
where  the  money  has  not  been  paid  over  by  the  stakeholder, 
although  it  has  been  lost  by  the  happening  of  the  event,  it  has 
been  held  that  upon  notice  and  demand,  the  stakeholder  is 
liable  to  the  loser  for  the  amount  by  him  deposited.  ...  It 
best  comports  with  public  policy,  to  arrest  the  illegal  proceed- 
ing before  it  is  consummated."  1 

When  the  parties  are  not  in  pari  delicto,  as  in  the  case  of 
a  wager  with  a  swindler  who  wins  by  trick  or  fraud,  since  the 
contract  is  not  malum  in  se,  the  victim  may  recover  his  stake 
even  after  payment  to  the  winner.2 

1  Hampden  v.  Walsh,  1876,  1  Q.  B.  D.  189 ;    Burge  v.  Ashley  & 
Smith,  [1900]  1  Q.  B.  744;   Hale  v.  Sherwood,  1873,  40  Conn.  332;  16 
Am.  Rep.  37;    Taylor  ».  Moore,  1898,  20  Ind.  App.  654;    50  N.  E. 
770;    Gilmore  v.  Woodcock,   1879,  69  Me.   118;    31  Am.  Rep.  255; 
Morgan  ».  Beaumont,  1876,  121  Mass.  7;    Whitwell  v.  Carter,  1856, 
4  Mich.  329;  Pabst  Brewing  Co.  v.  Listen,  1900,  80  Minn.  473;  83 
N.  W.  448;    81  Am.  St.  Rep.  275;    Wood  v.  Wood,  1819,  3  Murph. 
(N.  C.)  172 ;    Dauler  v.  Hartley,  1896,'  178  Pa.  St.  23 ;    35  Atl.  857 ; 
McGrath  v.  Kennedy,  1886,  15  R.  I.  209 ;    2  Atl.  438;    Guthman  v. 
Parker,  1859,  3  Head  (Tenn.)  233;    Lewy  v.  Crawford,  1893,  5  Tex. 
Civ.  App.  293 ;    23  S.  W.  1041 ;    Tarleton  v.  Baker,  1843,  18  Vt.  9 ; 
44  Am.  Dec.  358.     See,  contra,  Dooley  v.  Jackson,  1904,  104  Mo.  App. 
21,  78  S.  W.  330;   Yates  v.  Foot,  1814,  12  Johns.  (N.  Y.)  1 ;  Johnston 
v.  Russell,  1869,  37  Cal.  670 ;   holding  that  one  who  bets  on  an  election 
and  does  not  resile  until  the  result  of  the  election  is  known,  cannot 
recover  from  the  stakeholder. 

2  Lockman  v.  Cobb,  1905,  77  Ark.  279 ;    91  S.  W.  546 ;    Auxer  v. 
Llewellyn,  1908,  142  HI.  App.  265;    Webb  ».  Fulchire,  1843,  3  Ired. 
(25  N.  C.)  485;    40  Am.  Dec.  419;    Falkenburg  v.  Allen,   1907,   18 
Okla.  210;   90  Pac.  415;    10  L.  R.  A.  (N.  S.)  494.     But  see  Babcock 
o.  Thompson.  1826,  2  Pick.  (Mass.)  446;  15  Am.  Dec.  235. 

240 


Chap.  VIII]  CONTRACTS  MADE   ON   SUNDAY  [§  153 

Payment  over  to  the  winner  after  notice  or  demand  by  the 
loser  is  not  a  defense  in  an  action  against  the  stakeholder,1 
and  it  seems  that  in  such  a  case  the  money  may  be  recovered 
from  the  winner.2  Certainly,  the  winner  is  liable  if,  when  he 
receives  the  money,  he  is  aware  that  the  stakeholder  has  been 
notified  not  to  pay  it  over,  or  has  himself  received  notice  not 
to  take  it.3  It  has  been  held  that  the  right  to  recove  from  the 
stakeholder  will  not  be  defeated  by  the  fact  that  the  demand 
on  the  stakeholder  covered  the  whole  amount  in  his  hands, 
and  was  based  upon  the  ground  that  the  plaintiff  had  won  the 
bet.4  But  such  a  demand  is  obviously  inc  nsistent  with  the 
theory  of  repudiation  and  does  not  fairly  notify  the  stakeholder 
that  the  party  has  withdrawn  from  the  transaction.  That  the 
demand  must  be  for  the  amount  paid  to  the  stakeholder  by 
the  plaintiff  alone  would  seem  to  be  the  better  rule.5 

§  153.  (3)  Contracts  made  or  to  be  performed  on  Sunday.  — 
The  legality  of  contracts  made  or  to  be  performed  on  Sunday 
is  a  question  governed,  in  most  jurisdictions,  by  statute.  The 
enactments  vary  widely,  as  do  their  interpretations  by  the  courts. 
The  discussion  of  either  is  without  the  proper  limits  of  this 
treatise.  It  should  be  noted,  however,  that  a  contract  illegal 
because  entered  into  on  Sunday  is  peculiar  in  that  the  violation 
of  law  is  consummated  the  moment  the  contract  is  made.  It 
follows  that  there  should  be  no  locus  pcenitentice  for  the  parties 

1  Wise  v.  Rose,  1895,  110  Cal.  159;    42  Pae.  569;    McLennan  v. 
Whiddon,   1904,  120  Ga.  666;    48  S.  E.  201;    Alexander  v.  Mount, 
1858,  10  Ind.  161 ;   Adkins  v.  Flemming,  1870,  29  la.  122 ;  Turner  v. 
Thompson,  1900,  107  Ky.  647 ;    55  S.  W.  210 ;    McDonough  v.  Web- 
ster, 1878,  68  Me.  530 ;   Pabst  Brevring  Co.  v.  Liston,  1900,  80  Minn. 
473 ;  83  N.  W.  448 ;  81  Am.  St.  Rep.  275.   See  Johnston  v.  Russell, 
1869,  37  Cal.  670,  676. 

2  McKee  v.  Manice,  1853,  11  Cush.  (Mass.)  357;    West  v.  Holmes, 
1854,  26  Vt.  530. 

3  Love  v.  Harvey,  1873,  114  Mass.  80;   Guthman  v.  Parker,  1859, 
3  Head  (Tenn.)  233. 

4  Hastelow  v.  Jackson,  1828,  8  Barn.  &  Cress.  221 ;    Hale  v.  Sher- 
wood, 1873,  40  Conn.  332 ;  16  Am.  Rep.  37,  (with  a  vigorous  dissent- 
ing opinion). 

6  Maher  v.  Van  Horn,  1900,  15  Colo.  App.  14 ;  60  Pac.  949 ;  Oker- 
son  v.  Crittenden,  1883,  62  la.  297 ;  17  N.  W.  528. 

241 


§  153]  MISRELIANCE  ON  ILLEGAL  CONTRACT  [Part  I 

to  such  a  contract.1  There  are  cases  to  the  contrary,2  which 
rest  upon  the  misapprehension  that  the  locus  panitentioe  con- 
tinues until  the  contract  is  wholly  executed  (see  ante,  §  144). 
Indeed  there  are  cases  which  permit  the  recovery  of  money 
paid  or  property  delivered  under  a  Sunday  contract  which  has 
been  fully  performed  on  both  sides;3  but  this  is  clearly  con- 
trary to  the  weight  of  authority.4  On  the  other  hand,  in  the 
case  of  a  contract  which,  although  made  on  a  secular  day,  is 
illegal  because  to  be  performed  in  whole  or  in  part  on  Sunday 
the  right  to  resile  and  recover  the  benefit  of  part  performance 
continues  until  by  performance  on  Sunday  the  violation  of  law 
is  accomplished.5 

One  who  is  induced  by  fraudulent  representations  to  enter 
into  a  contract  which  is  in  violation  of  a  Sunday  law  should 
not  be  regarded  as  in  pari  delicto  and  consequently  should  be 
allowed  to  recover  a  benefit  conferred  in  performance  of  the  con- 
tract. It  has  been  so  held ; 6  but  there  are  cases  denying  relief  7 

1  See  Cranson  v.  Goss,  1871,  107  Mass.  439,  441 ;  9  Am.  Rep.  45, 
where  GRAY,  J.,  said :   "If  a  chattel  has  been  sold  and  delivered  on  the 
Lord's  day  without  payment  of  the  price,  the  seller  cannot  recover 
either  the  price  or  the  value ;    not  the  price  agreed  on  that  day,  be- 
cause the  agreement  is  illegal ;    not  the  value,  because,  whether  the 
property  is  deemed  to  have  passed  to  the  defendant,  or  to  be  held  by 
him  without  right,  there  is  no  ground  upon  which  a   promise   to  pay 
for  it  can  be  implied."     Also  Troewert  v.  Decker,  1881,  51  Wis.  46; 
8  N.  W.  26 ;   37  Am.  Rep.  808. 

2  Brown  v.  Timmany,  1851,  20  Ohio  81.     And  see  Myers   v.  Mein- 
rath,  1869,  101  Mass.  366,  369 ;   3  Am.  Rep.  368. 

3  Tucker  v.  Mowery,  1864,  12  Mich.  378 ;    Brazee  v.  Bryant,  1883, 
50  Mich.  136 ;    15  N.  W.  49. 

4  Thornhill  v.  O'Rear,  1896,  108  Ala.  299 ;   19  So.  382 ;   31  L.  R.  A. 
793,  (but  see  Dodson  v.  Harris,  1846, 10  Ala.  566) ;  Kelley  v.  Cosgrove, 
1891,  83  la.  229 ;  48  N.  W.  979;   Myers  v.  Meinrath,  1869,  101  Mass. 
366 ;   3  Am.  Rep.  368 ;   Foster  v.  Wooten,  1890,  67  Miss.  540 ;    7  So. 
501 ;  Thompson  ».  Williams,  1878,  58  N.  H.  248  ;  Chestnut  v.  Harbaugh, 
1875,  78  Pa.  St.  473 ;  Cohn  v.  Heimbauch,  1893,  86  Wis.  176 ;  56  N.  W. 
638. 

6  See  Stewart  v.  Thayer,  1898,  170  Mass.  560 ;  49  N.  E.  1020. 
«  Adams  v.  Gay,  1847,  19  Vt.  358. 

7  Plaisted   v.  Palmer,   1874,   63   Me.   576.      And    see     Robeson   v. 
French,  1846,  12  Met.  (Mass.)  24;   45  Am.   Dec.  236;   Northrup  t;. 
Foot,  1835,  14  Wend.  (N.  Y.)  248. 

242 


CHAPTER  IX 

MISRELIANCE   ON  ILLEGAL   CONTRACT  (continued)  :   ULTRA  VIRES 
CONTRACTS   OF   CORPORATIONS 

§  154.     Two  views  of  ultra  vires  contracts. 

§  155.     Difference  in  effect  between  two  doctrines. 

§  156.     The  illegality  of  ultra  vires  contracts  peculiar:    Do  general 

rules  apply  ? 
§  157.     The  right  to  restitution : 

(1)  In  England. 

§  158.       Same :   The  English  doctrine  as  to  money  borrowed. 
§  159.       (2)  In  the  United  States  Supreme  Court. 
§  160.       (3)  In  the  State  courts. 
§  161.     Enforcement  of  restitution  against  policy  :  Ultra  vires  contracts 

of  municipal  corporations. 

§  154.  Two  views  of  ultra  vires  contracts.  —  It  is  now  the 
favored  doctrine  that  a  corporation's  capacity  to  contract  is  not 
limited  by  its  charter  but  is  coextensive  with  that  of  a  natural 
person.1  However,  in  England,  in  the  United  States  Supreme 
Court,  and  in  some  of  the  States,  it  is  still  insisted  that  a  corpora- 
tion is  legally  incompetent  to  make  any  contract  not  reasonably 
incidental  to  the  objects  of  its  incorporation.2  And  it  is  every- 

1  Professor  Harriman,  14  Harv.  Law  Rev.  332,  335 ;   Machen,  "Cor- 
porations," §§  1019,  1020;  Morawetz,  "Corporations,"  §648;   George 
Wharton   Pepper,   9  Harv.   Law.    Rev.   255;   Wald's  Pollock,  "Con- 
tracts "  (Williston's  ed.),  139,  note  16. 

2  Ashbury  Ry.,  etc.,  Co.  v.  Riche,  1875,  L.  R.  7  H.  L.  653 ;  Central 
Transportation  Co.  v.  Pullman's,  etc.,  Co.,  1891,  139  U.  S.  24;   11  S.  Ct. 
478;    Chewacla  Lime  Works  v.  Dismukes,  1889,  87  Ala.  344;    6  So. 
122 ;  5  L.  R.  A.  100 ;  National  Home  Bldg.  Assn.  v.  Home  Sav.  Bank, 
1899,  181  111.  35  ;  54  N.  E.  619 ;  64  L.  R.  A.  399 ;  72  Am.  St.  Rep.  245 ; 
Brunswick  Gas  Light  Co.  v.  United  Gas  Co.,  1893,  85  Me.  532;    27 
Atl.  525;    35  Am.  St.  Rep.  385;    Western  Maryland  R.  Co.  v.  Blue 
Ridge  Hotel  Co.  1905,  102  Md.  307 ;   62  Atl.  351 ;   2  L.  R.  A.  (N.  S.) 
887;    11  Am.  St.  Rep.  362;    Buckeye  Marble  Co.  v.  Harvey,  1892, 
92  Tenn.  115;  20  S.  W.  427;   18  L.  R.  A.  252;  36  Am.  St.  Rep.  71 ; 
Metropolitan  Stock  Exch.  v.  Lyndonville  Nat.  Bank,  1904,  76  Vt.  303 ; 
57  Atl.  101. 

243 


§  155]  MISRELIANCE  ON   ULTRA   VIRES  CONTRACT         [Part  I 

where  conceded  that,  whether  competent  or  not,  a  corporation 
is,  as  a  matter  of  public  policy,  impliedly  prohibited  from  making 
such  a  contract.  It  follows  that  where  the  so-called  doctrine 
of  general  capacity  obtains,  the  only  objection  that  may  be  urged 
against  the  enforcement  of  an  ultra  vires  contract  is  that  of 
illegality ;  while  in  jurisdictions  accepting  the  so-called  doctrine 
of  special  capacity,  an  ultra  vires  contract  may  be  attacked  both 
as  unwarranted  by  law  and  as  void  for  want  of  capacity  to  con- 
tract. 

§  155.  Difference  in  effect  between  the  two  doctrines.  —  In 
theory  a  contract  void  for  want  of  contractual  capacity  is  a  legal 
nullity.  It  follows  that  full  performance  by  one  party  will  not 
make  the  contract  enforceable  against  the  other.  A  prohibited 
contract,  on  the  other  hand,  may  not  be  totally  inoperative. 
In  each  case  the  effect  of  the  prohibition  is  a  question  of  con- 
struction. And  in  cases  of  ultra  vires  contracts  of  corporations 
it  has  generally  been  held  that  full  performance  by  one  party 
will  make  the  contract  enforceable  against  the  other,  the  theory 
being  that  the  policy  of  forbidding  contracts  not  reasonably 
incidental  to  the  objects  of  incorporation  is  outweighed  by 
the  more  important  policy  of  preventing  one  who  has  enjoyed 
the  benefit  of  a  contract  not  malum  in  se  from  escaping  its 
obligation. 

As  a  result  of  the  distinction  just  pointed  out,  the  doctrine  of 
special  capacity  necessitates  a  more  frequent  resort  to  the  quasi 
contractual  theory  of  obligation  than  does  the  doctrine  of  gen- 
eral capacity.  Under  the  former  doctrine,  whether  one  has 
enjoyed  the  benefit  of  full  or  of  partial  performance  of  an  ultra 
vires  contract  by  the  other  party,  his  only  obligation  is  to  make 
restitution.  Under  the  latter,  if  one  has  enjoyed  the  benefit  of 
full  performance  by  the  other  party  he  may  be  held  contractu- 
ally, and  it  is  only  where  there  has  been  partial  performance  on 
one  side  and  full  performance  on  neither  that  it  is  necessary  to 
resort  to  quasi  contract. 

§  156.  The  illegality  of  ultra  vires  contracts  peculiar :  Do 
general  rules  apply  ?  —  It  must  not  be  forgotten  that,  whichever 
doctrine  of  capacity  obtains,  the  making  of  an  ultra  vires  con- 

244 


Chap.  IX]      ILLEGALITY   OF   ULTRA   VIRES   CONTRACTS         [§  15G 

tract  is  a  violation  of  statutory  prohibition,  either  express  or 
implied,  and  that  consequently  one  who  seeks  a  remedy  in 
quasi  contract  is  always,  in  a  sense,  in  the  position  of  a  party  to 
an  unlawful  transaction.  Is  the  right  to  recover  in  quasi  con- 
tract, then,  determined  by  the  same  rules  as  govern  quasi 
contractual  rights  arising  from  other  illegal  contracts  ?,  In  some 
cases  the  rule  of  par  delictum  has  been  recognized  and  the  right 
to  recover  has  been  based  ostensibly  upon  the  conclusion  that 
the  plaintiff  was  not  in  pari  delicto  with  the  defendant  corpora- 
tion.1 But  in  one  important  case  a  recovery  was  allowed  al- 
though the  court  expressly  declared  that  the  plaintiff  was  as 
much  in  fault  as  the  defendant.2  And  in  a  large  number  of 
cases  —  both  of  express  and  implied  prohibitions  —  there  is  no 
reference  whatever  either  to  par  delictum  or  to  locus  poeniten- 
tm?  This  indicates  that  the  illegality  of  ultra  vires  contracts 
is  generally  regarded  as  of  a  peculiar  and  comparatively  mild 
sort,  not  calling  for  the  application  of  the  rule  of  public  policy 
which  ordinarily  prevents  a  quasi  contractual  recovery.  The 
only  reason  that  has  been  adduced  in  support  of  this  view  is 
that  ultra  vires  contracts  are  contrary  to  public  policy,  not  be- 

1  White  v.  Franklin  Bank,  1839,  22  Pick.  (Mass.)  181.  See  also 
Parkersburgh  v.  Brown,  1882,  106  U.  S.  487;  1  S.  Ct.  442,  (implied 
prohibition) ;  Morville  v.  Am.  Tract  Society,  1877,  123  Mass.  129 ; 
25  Am.  Rep.  40,  (implied  prohibition). 

2  Pullman's  Car  Co.  v.  Central  Transp.  Co.,  1897,  171  U.  S.  138  ; 
18  S.  Ct.  808,  (express  prohibition).  And  see  Jenson  v.  Toltec  Ranch 
Co.,  1909,  174  Fed.  86 ;  98  C.  C.  A.  60,  (SANBORN,  Circuit  Judge,  at 
p.  92:  "It  is  no  defense,  to  a  suit  to  enforce  a  contract  that  has  been 
performed  by  the  promisee  to  repay  money  loaned  to  or  paid  for  an- 
other and  to  foreclose  a  mortgage  to  secure  that  repayment,  that  the 
lender  or  the  payor  knew  that  the  borrower  intended  to  use,  or  was 
using,  the  money  for  an  illegal  purpose,  or  a  purpose  beyond  its  cor- 
porate powers,  where  the  lender  or  payor  did  not  combine  or  conspire 
with  the  borrower  to  induce  such  a  use  and  did  not  share  in  the  benefits 
thereof."). 

3  See  Louisiana  v.  Wood,  1880,  102  U.  S.  294,  (express  prohibition) ; 
Logan  Co.  Nat.  Bank  v.  Townsend,  1891,  139  U.  S.  67;  11  S.  Ct.  496, 
(implied  prohibition) ;  New  Castle,  etc.,  R.  Co.  v.  Simpson,  1884,  21 
Fed.  533,  (express  prohibition) ;  Emmerling  v.  First  Nat.  Bank,  1889, 
97  Fed.  739 ;  38  C.  C.  A.  399,  (implied  prohibition) ;  Richmond  Guano 
Co.  v.  Farmers'  Cotton,  etc.,  Co.,  1903, 126  Fed.  712 ;  61  C.  C.  A.  630, 
(implied  prohibition). 

245 


§  156]  MISRELIANCE  ON  ULTRA   VIRES  CONTRACT         [Part  I 

cause  of  the  nature  of  their  subject  matter,  but  because  of 
the  corporate  character  of  one  of  the  parties.1  This  has  been 
thought  a  sufficient  reason,  however,  by  eminent  authority : 

MACHEN,  "Corporations,"  §  1020 :  "But  although  the  making 
of  ultra  vires  contracts  by  a  corporation  is  undoubtedly  pro- 
hibited by  law,  yet  the  illegality  is  of  a  very  peculiar  kind,  and 
hence  one  should  not  hastily  conclude  that  such  contracts 
must  necessarily  be  governed  by  the  same  rules  as  other  illegal 
contracts  —  contracts,  for  example,  that  are  mala  in  se.  The 
illegality  of  ultra  vires  contracts  depends  upon  no  policy  of  the 
law  as  to  the  subject  matter  to  which  they  relate,  but  solely 
upon  the  fact  that  they  are  not  within  the  company's  powers 
as  defined  in  its  act  of  incorporation  or  incorporation  paper. 
To  apply  to  them  precisely  the  same  rules  that  have  been  deemed 
necessary  in  order  to  discourage  illegal  contracts  in  general  and 
to  relieve  the  courts  from  the  disagreeable  task  of  nicely  ad- 
justing equities  between  various  parties  all  of  whom  have  been 
acting  contrary  to  good  morals  or  to  the  policy  of  the  law, 
would  be  both  illogical  and  unjust.  If,  therefore,  ultra  vires 
contracts  be  conceded  to  be  illegal,  they  should  be  governed 
by  rules  which  as  applied  to  this  peculiar  kind  of  illegality  are 
best  adapted  to  promote  the  policy  of  the  law  and  the  ends  of 
justice." 

Whatever  view  may  be  taken  as  to  the  effect  of  the  ordinary 
implied  prohibition,  it  seems  clear  that  the  legislature  in  ex- 
pressly prohibiting  certain  contracts  may  so  plainly  indicate 
an  intention  to  make  a  violation  of  the  prohibition  a  serious 
offense  against  public  policy  as  to  call  for  the  application  of  the 
rules  governing  other  illegal  contracts.2 

1  "Although  the  unauthorized  contract  may  be  neither  malum  in 
se,  nor  malum  prohibitum,  but,  on  the  contrary,  may  be  for  some 
benevolent  or  worthy  object,  as  to  build  an  alsmhouse  or  a  college,  or 
to  purchase  and  distribute  tracts  or  books  of  instruction,  yet,  if  it  is  a 
violation  of  public  policy  for  corporations  to  exercise  powers  which  have 

.  never  been  granted  to  them,  such  contracts,  notwithstanding  their  praise- 
worthy nature,  are  illegal  and  void."  —  SHELDON,  J.,  in  Bissel  v.  R. 
Co.,  1860,  22  N.  Y.  258,  285.  See  also  Peoria  Star  Co.  v.  Cutright, 
1904,  115  111.  App.  492,  495;  Franklin  Co.  v.  Savings  Bank,  1877,  68 
Me.  43,  48. 

2  See  Machen,  "Corporations,"  §  1065. 

246 


Chap.  IX]  THE   RIGHT  TO   RESTITUTION  [§  158 

§  157.  The  right  to  restitution:  (1)  In  England.  —The  Eng- 
lish courts  are  said  to  carry  out  the  theory  of  special  capacity 
with  "  severe  consistency."  1  Neither  the  authorization  of  an 
ultra  vires  contract  by  all  the  stockholders,2  nor  their  unanimous 
consent  to  the  entry  of  a  judgment  against  the  corporation  on 
such  a  contract,  will  result  in  obligation.3  The  decisions  waver 
slightly,  however,  upon  the  subject  of  the  quasi  contractual 
obligation  to  restore  benefits  received  under  ultra  vires  contracts. 
In  a  case  holding  that  a  joint  stock  company  organized  for  the 
purpose  of  life  assurance,  which  issues  policies  on  marine  as- 
surance without  complying  with  the  statutory  requirements 
for  enlarging  the  scope  of  its  business,  is  obliged  to  return  the 
premiums  received  on  such  ultra  vires  policies,  the  principle  was 
recognized : 

Re  Phoenix  Life  Assurance  Co.,  1862,  2  Johns.  &.  Hem.  411 : 
Vice  Chancellor  WOOD,  (p.  448) :  "The  Directors,  it  is  true, 
had  no  power  to  issue  marine  policies,  but  they  had  power  to 
receive  money,  and  apply  it  for  the  benefit  of  the  Company. 
It  is  proved  that  they  did  so  receive  and  apply  these  premiums, 
and  the  amount  might  have  been  recovered,  even  at  law,  as 
money  had  and  received." 

But  in  the  most  conspicuous  class  of  cases  —  that  of  money 
borrowed  ultra  vires  —  the  application  of  the  principle  has  been 
restricted  to  very  narrow  limits. 

§  158.  Same:  The  English  doctrine  as  to  money  borrowed 
ultra  vires.  —  It  appears  to  be  settled  that  money  borrowed 
ultra  vires  is  not  recoverable  at  law  by  the  lender,4  unless  it 
remains  unused  in  the  hands  of  the  corporation.5  In  equity, 
however,  it  is  held  that  money  so  borrowed  must  be  refunded 

1  Machen,  "Corporations,"  §  1028. 

2  East  Anglian  R.  Co.  ».  Eastern  Counties  R.  Co.,  1851,  11  C.  B. 
775. 

3  Great  North-West,  etc.,  R.  Co.  v.  Charlebois,  [18991  A.  C.  114. 

4  See    Chambers  v.    R.  Co.,   1864,   5  Barn.  &   Cress.  588 ;    In  re 
National,  etc.,  Building  Society,  1869,  L.  R.  5  Ch.  309 ;  In  re  Victoria, 
etc.,  Society,  1870,  L.  R.  9  Eq.  605. 

6  See  In  re  Wrexham,  etc.,  R.  Co.,  [1899]  1  Ch.  440,  457. 

247 


§  158]  MISRELIANCE  ON   ULTRA   VIRES  CONTRACT        [Part  I 

to  the  extent  that  it  has  been  used  in  the  discharge  of  legitimate 
debts  of  the  corporation.1  This  rule  was  based  originally  upon 
the  doctrine  of  subrogation  and  seems  to  have  been  suggested 
by  the  analogy  to  cases  of  money  borrowed  by  infants  or  married 
women  and  expended  for  necessaries,2  but  in  the  later  cases  it  is 
said  to  rest  upon  the  theory  that  if  money  borrowed  is  so  ex- 
pended as  not  to  increase  the  liabilities  of  the  corporation  there 
is  in  substance  no  borrowing  at  all  and  the  transaction  should 
not  be  regarded,  in  equity,  as  ultra  vires: 

Blackburn  Building  Society  v.  Cunliffe,  1882,  22  Ch.  Div.  61 : 
Lord  SELBORNE,  L.J.  (p.  71) :  "The  test  is:  has  the  transac- 
tion really  added  to  the  liabilities  of  the  company?  If  the 
argument  of  the  company's  liabilities  remains  in  substance 
unchanged,  but  there  is,  merely  for  the  convenience  of  payment, 
a  change  of  the  creditor,  there  is  no  substantial  borrowing  in 
the  result,  so  far  as  related  to  the  position  of  the  company." 

The  soundness  of  this  reasoning  may  be  questioned.  Where 
a  corporation  is  given  power  to  borrow,  but  is  forbidden  to 
borrow  after  a  prescribed  limit  of  indebtedness  is  reached,  it  is 
clear  enough  that  the  purpose  of  the  prohibition  is  merely  to 
keep  the  corporation  within  the  limit  fixed,  and  therefore  that 
money  borrowed  after  the  limit  is  cached  but  immediately 
applied  in  payment  of  a  preexisting  debt  is  in  reality  not  bor- 
rowed ultra  vires?  But  where  a  corporation  is  given  no  power 
whatever  to  borrow  it  is  going  rather  far  to  conclude  that  money 
borrowed  and  applied  in  discharge  of  debts  arising  either  before 
or  after  such  borrowing,  is  in  substance  not  borrowed  at  all.4 
It  would  be  simpler  and  more  equitable,  it  is  submitted,  to  allow 

1  Troup's  Case,  1860,  29  Beav.  353 ;  In  re  Cork,  etc.,  R.  Co.,  1869, 
L.  R.  4  Ch.  748 ;  Blackburn  Building  Society  v.  Cunliffe,  1882,  22  Ch. 
Div.  61 ;   Baroness  Wenlock  ».  River  Dee  Co.,  1887,  19  Q.  B.  D.  155. 

2  See  In  re  National,  etc.,  Building  Society,  1869,  L.  R.  5  Ch.  309 ; 
Baroness  Wenlock  v.  River  Dee  Co.,  1887,  19  Q.  B.  D.  155,  165. 

3  See   In  re  Wrexham,  etc.,  R.  Co.,  [1899]  1  Ch.  440,  457. 

4  In  Baroness  Wenlock  v.  River  Dee  Co.,  1887,  19  Q.  B.  D.  155,  it 
was  held  to  be  immaterial  whether  the  money  was  applied  in  dis- 
charge of  debts  arising  before  or  after  the  borrowing. 

248 


Chap.  IX]  THE   RIGHT   TO   RESTITUTION  [§  158 

a  recovery  in  quasi  contract  whenever  it  appears  that  the  money 
loaned  to  a  corporation  was  loaned  in  reliance  upon  the  validity 
of  the  company's  contract  and  either  remains  in  the  company's 
hands  or  has  been  used  in  the  legitimate  business  of  the  company, 
whether  in  the  payment  of  debts,  the  purchase  of  property,  or 
otherwise.  The  language  of  the  courts,  in  a  few  instances, 
seems  broad  enough  to  support  such  a  rule : 

Troup's  Case,  1860,  29  Beav.  353 :  A  claim  by  the  secretary 
of  an  electrical  telegraph  company  against  the  company,  under 
a  winding-up  order,  for  money  borrowed  by  him  for  the  company 
and  applied  for  its  benefit.  The  claim  was  opposed  on  the 
ground  that  the  company  had  no  power  to  borrow  money.1 
It  appeared  that  the  money  had  been  applied,  in  the  main,  to 
the  satisfaction  of  a  debt  due  from  a  contractor  to  a  bank, 
against  which  debt  the  directors  of  the  company  had  agreed 
to  indemnify  the  contractor  in  part  payment  for  certain  works 
and  materials  prepared  by  the  contractor  for  the  construction 
of  the  company's  telegraph  line.  The  Master  of  the  Rolls 
[Sir  JOHN  ROMILLY]  (p.  356) :  "  The  company  thereby  obtained 
the  stock  and  materials  in  this  manner  and  have  sold  them  for 
about  the  price  they  gave  for  them  (the  price,  however,  is  im- 
material), and  the  proceeds  of  this  sale  have  been  divided  among 
the  shareholders,  or  if  not  so  divided,  have  gone  in  diminution 
of  the  calls  upon  the  shareholders  by  being  applied  in  making 
good  the  claims  upon  the  company.  .  .  .  The  principle  is 
this :  —  that  where  the  Directors  of  a  company  have  no  power 
to  borrow  money,  the  repayment  of  money  borrowed  cannot 
be  enforced  by  the  lender  against  the  company ;  yet,  if  the 
money  has  been  bona  fide  applied  to  the  purposes  of  the  com- 
pany, the  bona  fide  lender  is  entitled  to  payment  as  against 
the  company." 

But,  on  the  other  hand,  it  has  been  explicitly  held  that  where 
money  is  borrowed  ultra  vires  by  a  benefit  building  society  and 
advanced  to  its  members  upon  mortgage  security  (such  loans 
to  members  being  intra  vires),  the  society  is  not  obliged,  even  in 

1  In  this  case,  as  in  some  others  cited  in  this  section,  it  is  not  en- 
tirely clear  whether  the  contract  was  beyond  the  powers  of  the  cor- 
poration or  merely  beyond  the  powers  of  the  directors. 

249 


§  159]  MISRELIANCE  ON   ULTRA   VIRES  CONTRACT        [Part  I 

equity,  to  make  restitution  to  the  lender.1    And  in  other  cases 
there  are  strong  dicta  to  the  same  effect.2 

The  reason  usually  given  for  denying  a  recovery  where  the 
money  borrowed  is  expended  in  the  legitimate  business  of  the 
corporation,  but  not  in  the  payment  of  its  debts,  is  that  to  per- 
mit a  recovery  would  be  in  effect  to  enforce  the  ultra  vires  con- 
tract of  loan : 

In  re  Wrexham,  etc.,  R.  Co.,  [1899]  1  Ch.  440:  VAUGHAN 
WILLIAMS,  L. J.  (p.  457) :  "  But,  if  the  company,  instead  of 
either  refraining  from  adopting  the  loan,  or  applying  it  in  such 
a  manner  as  that  their  total  indebtedness  shall  remain  unchanged, 
apply  it,  say,  to  the  purchase  of  new  property,  the  company 
cannot,  after  so  doing,  be  sued  in  any  form  for  a  return  of  the 
money,  since  the  money  had  been  dealt  with  under  the  contract 
of  loan,  and  to  allow  the  company  to  repay  it  would  simply  be 
to  allow  them  to  carry  through  an  ultra  vires  transaction." 

In  reply  to  this  argument  it  might  be  urged  that  to  allow 
money  loaned  upon  an  ultra  vires  contract  to  be  recovered  before 
the  maturity  of  the  loan  is  quite  different  from  allowing  the 
parties  "  to  carry  through  an  ultra  vires  transaction."  But 
granting  the  cogency  of  the  argument,  what  actual  harm  would 
result  if  the  lender  were  allowed  a  quasi  contractual  recovery  ? 
At  the  worst,  such  a  rule  might  offer  some  encouragement  to 
the  making  of  ultra  vires  contracts  of  loan.  On  the  other  hand, 
and  of  vastly  greater  importance,  it  would  afford  adequate 
protection  to  the  innocent  lender  —  protection  entirely  consist- 
ent, moreover,  with  the  English  theory  of  corporate  capacity. 

§  159.  (2)  In  the  United  States  Supreme  Court.  —  The  Fed- 
eral courts  of  the  United  States  have  not  been  as  consistent  as 
the  English  courts  in  their  attitude  toward  ultra  vires  contracts.3 
The  Supreme  Court,  however,  has  steadfastly  professed  adher- 
ence to  the  doctrine  of  special  capacity,  and  in  the  face  of  a 
swelling  current  of  adverse  authority  has  insisted  that  contracts 

1  In  re  National,  etc.,  Building  Society,  1869,  L.  R.  5  Ch.  309. 

2  See  In  re  Wrexham,  etc.,  R.  Co.,  [1899]  1  Ch.  440,  457. 

3  See  Machen,  "Corporations,"  §§  1032-47. 

250 


Chap.  IX]      IN  THE   UNITED   STATES   SUPREME   COURT         [§  159 

ultra  vires  are  absolutely  void,  and  therefore  that  even  though 
performed  on  one  side  they  are  unenforceable.  In  the  leading 
case  of  Central  Transp.  Co.  v  Pullman's,  etc.,  Co.,1  Mr.  Justice 
GRAY  expounded  this  view  in  language  so  forceful  and  so 
frequently  quoted  that  it  has  become  familiar : 

"A  contract  of  a  corporation,  which  is  ultra  vires,  in  the 
proper  sense,  that  is  to  say,  outside  the  object  of  its  creation 
as  defined  in  the  law  of  its  organization,  and  therefore  beyond 
the  powers  conferred  upon  it  by  the  legislature,  is  not  void- 
able only,  but  wholly  void,  and  of  no  legal  effect.  The 
objection  to  the  contract  is,  not  merely  that  the  corporation 
ought  not  to  have  made  it,  but  that  it  could  not  make  it.  The 
contract  cannot  be  ratified  by  either  party,  because  it  could  not 
have  been  authorized  by  either.  No  performance  on  either 
side  can  give  the  unlawful  contract  any  validity,  or  be  the 
foundation  of  any  right  of  action  upon  it." 

In  the  same  case  it  was  pointed  out 2  that  while  there  is  no 
remedy  for  breach  of  the  contract,  the  receipt  of  property  de- 
livered or  money  paid  upon  the  faith  of  the  contract  gives  rise 
to  an  obligation  to  make  restitution  either  in  specie  or  in  value  : 

"A  contract  ultra  vires  being  unlawful  and  void,  not  because 
it  is  in  itself  immoral,  but  because  the  corporation,  by  the 
law  of  its  creation,  is  incapable  of  making  it,  the  courts,  while 
refusing  to  maintain  any  action  upon  the  unlawful  contract, 
have  always  striven  to  do  justice  between  the  parties,  so  far 
as  could  be  done  consistently  with  adherence  to  law,  by  per- 
mitting property  or  money,  parted  with  on  faith  of  the  un- 
lawful contract,  to  be  recovered  back,  or  compensation  to  be 
made  for  it." 

In  a  later  suit  arising  from  the  same  transaction  as  Central 
Transp.  Co.  v.  Pullman's  Co.,3  the  obligation  to  make  restitu- 
tion was  actually  enforced,  and  in  a  number  of  other  cases 

1 1897,  139  U.  S.  24,  59  ;  US.  Ct.  478. 

2  At  page  60. 

3  Pullman's  Palace  Car  Co.  v.  Central  Transp.  Co.,  1897,  171  U.  S. 
138;   18  S.  Ct.  808. 

251 


§  159]  MISRELIANCE   ON   ULTRA   VIRES   CONTRACT        [Part  I 

in  the  Federal  courts  the  principle  has  been  recognized  and 
applied.1 

Cases  arising  from  ultra  vires  borrowing  appear  to  be  less  fre- 
quent —  certainly  they  are  less  conspicuous  —  in  America  than 
in  England.  This  is  probably  due  in  part  to  the  fact  that  there 
has  been  little  disposition  in  this  country  to  adopt  the  restric- 
tions which  the  English  courts  have  placed  upon  the  lender's 
right  to  recover  (ante,  §  158).  In  a  comparatively  recent  case, 
Aldrich  v.  Chemical  National  Bank,2  for  example,  the  Supreme 
Court  of  the  United  States  concludes  a  discussion  of  the  ques- 
tion as  follows : 

"Without  further  citation  of  cases  we  adjudge,  both  upon 
principle  and  authority,  that  as  the  money  of  the  Chemical 
Bank  was  obtained  under  a  loan  negotiated  by  the  vice  presi- 
dent of  the  Fidelity  Bank,  who  assumed  to  represent  it  in 
the  transaction,  and  as  the  Fidelity  Bank  used  the  money 
so  obtained  in  its  banking  business  and  for  its  own  benefit, 
the  latter  bank  having  enjoyed  the  fruits  of  the  transaction  can- 
not avoid  accountability  to  the  New  York  bank,  even  if  it  were 
true  as  contended  that  the  Fidelity  Bank  could  not  consistently 
with  the  law  of  its  creation  have  itself  borrowed  the  money."  8 

It  is  true  that  in  this  case  the  money  borrowed  ultra  vires  was 
applied  in  payment  of  valid  debts  of  the  bank,  and  therefore 
that  the  lender  would  have  been  protected  under  the  doctrine 
of  the  English  courts  of  equity.  But  it  is  significant  that  the 
Supreme  Court  makes  no  reference  to  the  English  doctrine,  and 

1  Logan  Co.  Nat.  Bank  v.  Townsend,  1891,  139  U.  S.  67;  11  S.  Ct. 
496 ;  Aldrich  v.  Chemical  Nat.  Bank,  1900,  176  U.  S.  618 ;  20  S.  Ct. 
498 ;  Citizens  Nat.  Bank  v.  Appleton,  1910,  216  U.  S.  196 ;  30  S.  Ct. 
364,  (aff.  Appleton  v.  Citizens  Bank,  1908,  190  N.  Y.  417 ;  83  N.  E. 
470) ;  Manville  v.  Belden  Mining  Co.,  1883,  17  Fed.  425  (C.  C.,  Colo.)  ; 
New  Castle,  etc.,  R.  Co.  v.  Simpson,  1884, 21  Fed.  533  (C.  C.,  Pa.) ; 
Emmerling  v.  First  Nat.  Bank,  97  Fed.  739 ;  38  C.  C.  A.  399 ;  Rich- 
mond Guano  Co.  v.  Farmers'  Cotton,  etc.,  Co.,  1903,  126  Fed.  712 ; 
61  C.  C.  A.  630.  Cf.  Am.  Nat.  Bank  v.  Nat.  Wall  Paper  Co.,  1896, 
77  Fed.  85 ;  23  C.  C.  A.  33 ;  40  U.  S.  App.  646. 

2 1900,  176  U.  S.  618,  635  ;  20  S.  Ct.  498. 

3  And  see  Sioux  City  Terminal,  etc.,  Co.  v.  Trust  Co.,  1897,  82  Fed. 
124;  27  C.  C.  A.  73;  49  U.  S.  App.  523. 

252 


Chap.  IX]      IN  THE   UNITED   STATES   SUPREME   COURT         [§  159 

repeatedly  emphasizes  the  use  of  the  money  for  the  bank's 
benefit,  not  merely  the  payment  of  its  debts,  as  the  basis  of 
obligation. 

The  case  of  Logan  County  Nat.  Bank  v.  Townsend1  has 
attracted  some  attention  and  has  been  thought  inconsistent  with 
other  decisions  of  the  Supreme  Court.  In  an  action  to 
recover  damages  for  breach  of  contract  it  appeared  that  the 
bank  bought  certain  municipal  bonds  from  Townsend  for  a  sum 
in  cash,  which  was  paid,  and  agreed  to  replace  the  bonds, 
upon  demand,  at  the  same  or  a  less  price.  Subsequently 
Townsend  demanded  compliance  with  this  agreement,  but  the 
bank  refused.  Said  Mr.  Justice  HARLAN  : 

"  If  it  be  assumed,  in  accordance  with  the  bank's  contention, 
that  it  was  without  power  to  purchase  these  bonds,  to  be  re- 
placed to  the  plaintiff,  on  demand,  the  question  would  still 
remain,  whether,  notwithstanding  the  act  of  Congress  defining 
and  limiting  its  powers,  it  was  exempt  from  liability  to  the 
plaintiff  for  the  value  of  the  bonds,  if  it  refused,  upon  demand, 
to  replace  or  surrender  them  at  the  same  or  a  less  price. 

"It  would  seem,  upon  the  defendant's  theory  of  its  powers, 
to  be  too  clear  to  admit  of  dispute  that  the  act  of  Congress  does 
not  give  to  a  national  bank  an  absolute  right  to  retain  bonds 
coming  into  its  possession,  by  purchase,  under  a  contract 
which  it  was  without  authority  to  make.  True,  it  is  not  under 
a  duty  to  surrender  possession  until  reimbursed  the  full  amount 
due  to  it :  it  has  the  right  to  hold  the  bonds  as  security  for  the 
return  of  the  consideration  paid  for  them;  but  when  such 
amount  is  returned,  or  tendered  back  to  it,  and  the  surrender 
of  the  bonds  is  demanded,  its  authority  to  retain  them  no  longer 
exists.  And  from  the  time  of  such  demand  and  its  refusal 
to  return  the  bonds  to  the  vendor  or  owner,  it  becomes  liable 
for  their  value  upon  grounds  apart  from  the  contract  under 
which  it  obtained  them.  .  .  . 

".  .  .  The  bank,  if  liable  at  all,  is  certainly  liable  in  this 
case,  for  the  value  of  the  bonds  at  the  time  it  refused,  upon 
demand,  to  restore  them.  It  was  not  in  default,  under  the 
alleged  contract,  until  the  plaintiff's  demand  for  its  performance ; 

1 1891,  139  U.  S.  67,  74,  78 ;  US.  Ct.  496. 
253 


§  159]  MISRELIANCE   ON   ULTRA  VIRES   CONTRACT        [Part  I 

for  until  then  its  possession  of  the  bonds  was  with  his  consent. 
Until  demand,  the  plaintiff  had  not  manifested  his  will  to  have 
them  restored  to  him.  The  conversion  occurred  when  the 
defendant  repudiated  all  obligation  to  perform  the  contract 
or  denied  that  any  such  contract  was  ever  made,  and  yet  held 
on  to  the  bonds  as  its  property." 

In  its  dictum  to  the  effect  that  the  bank  had  a  lien  "on  the  bonds 
for  the  amount  paid  for  them  under  the  ultra  vires  contract,  the 
case,  it  is  submitted,  goes  too  far.  The  learned  court  relied 
upon  a  supposed  analogy  to  cases  holding  that  a  national  bank 
may  enforce  a  mortgage  or  deed  of  trust  taken  ultra  vires  as 
security  for  a  loan,1  but  apparently  overlooked  this  vital  dis- 
tinction —  that  whereas  a  mortgage  or  deed  of  trust  taken  ultra 
vires  as  security  for  a  loan  may  be  upheld  upon  the  theory  that 
it  is  fully  executed  and  therefore  should  not  be  disturbed,2  the 
ultra  vires  contract  in  the  principal  case  was  not  an  executed 
contract,  but  was  only  partly  performed.  Moreover,  if  the 
contract  was  to  be  upheld  as  executed,  or  so  far  as  executed,  the 
bank  should  have  been  adjudged  the  owner  of  the  bonds  and 
not  merely  the  holder  of  a  lien  upon  them. 

In  holding  that  upon  its  refusal  to  restore  the  bonds  when 
the  plaintiff  tendered  a  return  of  the  price  the  bank  became 
liable  for  the  difference  between  such  price  and  the  value  of  the 
bonds  at  the  time  of  the  plaintiff's  demand,  it  is  believed  that 
the  court  was  right.  Mr.  Machen  contends  that  upon  the  theory 
of  quasi  contractual  obligation  the  measure  of  recovery  would 
be  the  difference  between  the  price  paid  by  the  bank  and  the 
market  value  at  the  time  of  the  purchase  by  the  bank.3  He 
overlooks,  however,  the  fact  that  in  refusing  to  return  the  bonds 
upon  demand  and  tender  of  the  price  the  bank  converted  them. 
This  was  recognized  by  the  court.  For  this  tort  the  plaintiff 
had  an  election  of  remedies  (post,  §  277).  He  might  bring 
trover  and  recover  damages,  or  "waive  the  tort "  and  sue  in 
assumpsit  for  the  value  of  the  benefit  derived  by  the  defendant 

1  See  opinion  at  page  76. 

2  See  Machen,  "Corporations,"  §  1036,  and  cases  cited. 
1  See  Machen,  "Corporations,"  §  1046. 

254 


Chap.  IX]  IN   THE   STATE   COURTS  [§  160 

from  the  conversion.  The  action  in  the  principal  case,  though 
in  form  an  action  for  breach  of  contract,  was  regarded,  appar- 
ently, as  an  election  of  assumpsit  as  a  remedy  for  the  tort,  and 
it  was  entirely  proper  for  the  court  to  allow  a  recovery  of  the 
value  of  the  bonds  at  the  time  of  the  conversion,  i.e.  at  the  time 
of  the  wrongful  refusal  to  return  them,  minus  the  price  which 
the  bank  paid  for  them  and  which  the  plaintiff  offered  to  return. 
§  160.  (3)  In  the  State  courts. —  In  the  decisions  of  the  State 
courts  there  is  the  utmost  confusion.  In  a  large  number  of 
States  it  is  held  that  one  who  has  enjoyed  the  benefit  of  full 
performance  by  the  other  party  is  liable  in  damages  for  a  failure 
himself  to  perform.1  Likewise,  if  the  contract  is  severable, 
the  full  performance  of  a  severable  portion  on  one  side  makes 
the  obligation  of  the  other  party  as  to  that  portion  enforceable.2 
The  rule  is  frequently  attributed  to  the  convenient  principle 
of  estoppel;  sometimes  it  is  otherwise  explained.  Whatever 
its  ostensible  basis,  it  probably  rests,  in  reality,  upon  the  theory 
than  an  ultra  vires  contract  is  not  void  for  want  of  contractual 
capacity  but  is  illegal  as  against  sound  public  policy,  and  that 
when  performed  by  one  party  public  policy  requires  that  it 
should  be  enforced  rather  than  that  the  party  who  has  en- 
joyed the  benefit  of  performance  should  be  allowed  to  escape 
its  obligation.  In  States  which  have  adopted  this  doctrine 
the  question  of  quasi  contractual  obligation  arises,  or  should 

1  Main  ».  Casserly,  1883,  67  Cal.  127;  7  Pac.  426;  Chicago,  etc.,  R. 
Co.  v.  Derkes,  1885,  103  Ind.  520 ;  3  N.  E.  239 ;  Dewey  v.  Toledo,  etc., 
R.  Co.,  1892,  91  Mich.  351 ;  51  N.  W.  1063 ;  Seymour  v.  Chicago,  etc., 
Life  Co.,  1893,  54  Minn.  147 ;  55  N.  W.  907 ;  Camden,  etc.,  R.  Co.  v. 
May's  Landing,  etc.,  R.  Co.,  1886,  48  N.  J.  L.  530 ;  7  Atl.  523 ;  Bath 
Gas  Light  Co.  v.  Claffy,  1896,  151  N.  Y.  24 ;  45  N.  E.  390 ;  36  L.  R.  A. 
664,  (and  see  Appleton  v.  Citizens  Nat.  Bank,  1908,  190  N.  Y.  417 ; 
420-421 ;  83  N.  E.  470) ;    Tourtelot  v.  Whithed,  1900,  9  N.  D.  407 ; 
84  N.  W.  8 ;   Wright  ».  The  Pipe  Line  Co.,  1882,  101  Pa.  St.  204 ;   47 
Am.  Rep.  701;  Bond  v.  Terrell,  etc.,  Mfg.  Co.,  1891,  82  Tex.  309;  18 
S.  W.  691;    McElroy  v.  Minn.  Percheron  Horse  Co.,  1897,  96   Wis. 
317 ;    71  N.  W.  652 ;   Kanneberg  v.   Evangelical  Creed  Congregation, 
1911,  146  Wis.  610 ;  131  N.  W.  353. 

2  Heims  Brewing  Co.  v.  Flannery,  1891,  137  111.  309;  27  N.  E.  286. 
But  see  Day  v.  Buggy  Co.,  1885,  57  Mich.  146 ;  23  N.  W.  628 ;  58  Am. 
Rep.  352. 

255 


§  160]  MISRELIANCE   ON   ULTRA   VIRES   CONTRACT        [Part  I 

arise,  only  where  there  has  been  partial  performance  of  the 
ultra  vires  contract  on  one  side  but  full  performance  on  neither. 
In  such  cases,  a  recovery  in  quasi  contract  should  be  permitted.1 
In  a  smaller  number  of  States  the  doctrine  of  the  United 
States  Supreme  Court  appears  to  be  substantially  adopted, 
and  the  full  performance  of  the  contract  on  one  side  is  held  not 
to  make  it  enforceable.2  In  such  jurisdictions  it  is  generally 
held  that  where  performance  on  one  side,  either  partial  or  in 
full,  results  in  a  benefit  to  the  other  party,  there  is  a  quasi 
contractual  obligation  to  make  restitution : 

Brunswick  Gas  Light  Co.  v.  United  Gas  Co.,  1893,  85  Me.  532 ; 
27  Atl.  525 ;  35  Am.  St.  Rep.  385 :  Action  for  breach  of  cove- 
nants of  a  lease.  WALTON,  J.  (p.  540) :  "  No  legislative  authority 
for  making  the  lease  was  shown,  and  without  such  authority, 
we  think  the  lease  must  be  regarded  as  ultra  vires,  and  void.  .  .  . 
But  it  is  claimed  that,  inasmuch  as  the  defendant  company 
took  and  held  possession  of  the  plaintiff  company's  works  by 
virtue  of  the  lease,  ultra  vires  is  no  defense  to  an  action  to  recover 
the  agreed  rent.  We  do  not  doubt  that  the  plaintiff  company 
is  entitled  to  recover  a  reasonable  rent  for  the  time  the  defend- 

1  Day  v.  Buggy  Co.,  1885,  57  Mich.  146 ;  23  N.  W.  628 ;  58  Am. 
Rep.  352.     And  see  Northwestern  Union  Packet  Co.  v.  Shaw,  1875,  37 
Wis.  655;  19  Am.  Rep.  781. 

2  Anglo-American  Land,  etc.,  Co.  v.  Lombard,  1904,  132  Fed.  721, 
741 ;   68  C.  C.  A.  89,  (Mo.  law) ;    Chewacla  Lime  Works  v.  Dismukes, 
1889,  87  Ala.  344 ;    6  So.  122 ;    5  L.  R.  A.  100 ;    First  Nat.  Bank  v. 
Alexander,  1907,  152  Ala.  585 ;    44  So.  866 ;    National  Home  Bldg. 
Assn.  v.  Home  Savings  Bank,  1899,  181  111.  35;    54  N.  E.  619;    64 
L.  R.  A.  399 ;  72  Am.  St.  Rep.  245 ;  Davis  v.  Old  Colony  R.  Co.,  1881, 
131  Mass.  258;    41  Am.  Rep.  221,   (cf.  Slater  Woolen  Co.  v.   Lamb, 
1887,  143  Mass.  420;    9  N.  E.  823;    Prescott  Nat.  Bank  v.  Butler, 
1893,  157  Mass.  548 ;    32  N.  E.  909) ;    Norton  v.  Derby  Nat.  Bank, 
1882,  61  N.  H.  589 ;   60  Am.  Rep.  334 ;   Miller  v.  Insurance  Co.,  1893, 
92  Tenn.  167;   21  S.  W.  39;   20  L.  R.  A.  765;   Metropolitan  Stock 
Exch.  v.  Lyndonville  Nat.  Bank,  1904,  76  Vt.  303 ;    57  Atl.  101. 

The  Illinois  courts  make  a  distinction  between  acts  not  authorized 
by  the  charter  and  those  within  the  charter  powers  but  which  are 
invalid  through  failure  to  comply  with  regulations,  etc.  A  benefit 
conferred  under  the  former  cannot  be  recovered  if  the  contract  be 
ultra  vires,  while  it  may  if  it  be  one  of  the  latter  description.  National 
Home,  etc.,  Assn.  v.  Home  Sav.  Bank,  supra;  Wood  v.  Mystic  Circle, 
1904,  212  111.  532 ;  72  N.  E.  783 ;  Smith  v.  Bankers'  Union  of  Chicago, 
1908,  144  111.  App.  384. 

256 


Chap.  IX]  IN   THE   STATE   COURTS  [§  160 

ant  company  actually  occupied  the  works ;  but  do  not  think 
the  amount  can  be  measured  by  the  ultra  vires  agreement. 
We  think  that  in  such  cases  the  recovery  must  be  had  upon  an 
implied  agreement  to  pay  a  reasonable  rent;  and  that,  while 
the  ultra  vires  agreement  may  be  used  as  evidence,  in  the  nature 
of  an  admission,  of  what  is  a  reasonable  rent,  it  can  not  be 
allowed  to  govern  or  control  the  amount." 

The  Northwestern  Union  Packet  Co.  v.  Shaw,  1875,  37  Wis. 
655 ;  19  Am.  Rep.  781 :  Action  for  breach  of  contract  by  which 
the  plaintiff  agreed  to  buy  wheat  from  the  defendant  and  paid 
$1000  to  defendant  on  account  thereof.  Defense:  that  the 
contract  was  ultra'vires  and  consequently  void.  LYON,  J.,  after 
holding  that  the  contract  was  ultra  vires  and  that  damages  for 
its  breach  could  not  be  recovered  (p.  660) * :  "  But  the  question 
remains  whether  the  plaintiff  is  entitled  to  recover  the  $1000.  .  .  . 
The  cases  have  been  carefully  examined,  and  we  think  the  rule 
may  fairly  be  deduced  from  them,  that  when  money  has  been 
paid  upon  an  executory  agreement,  which  is  free  from  moral 
turpitude,  and  is  not  prohibited  by  positive  law,  but  which  is 
invalid  by  reason  of  the  legal  incapacity  of  a  party  thereto, 
otherwise  capable  of  contracting,  to  enter  into  that  particular 
agreement,  or  for  want  of  compliance  with  some  formal  re- 
quirement of  the  law  (as  that  the  contract  shall  be  in  writing, 
and  the  like),  the  money  so  paid  may,  while  the  agreement 
remains  executory,  be  recovered  back  by  the  party  paying  it, 
in  an  action  for  money  had  and  received.  ...  A  contract  to 
buy  wheat  is  an  innocent  one;  no  statute  has  prohibited  it; 
and  this  particular  agreement  is  invalid  only  by  reason  of  the 
accident  that  the  purchaser  is  a  corporation  instead  of  a  natural 
person,  and  happens  to  lack  authority  to  make  this  particular 
contract."  2 

1  In  later  Wisconsin  cases  it  was  held  that  a  corporation  is  estopped 
to  set  up  the  defense  of  ultra  vires  after  receiving  the  benefit  of  full 
performance  on  the  other  side.     See  McElroy  v.  Minn.  Percheron  Horse 
Co.,  1897,  96  Wis.  317 ;  71  N.  W.  652 ;  Bigelow  v.  Chicago,  etc.,  R.  Co., 
1899,  104  Wis.  109 ;  80  N.  W.  95. 

2  See  also   Brown  v.  City  of  Atchison,  1888,  39  Kan.  37 ;    17  Pac. 
465 ;   7  Am.  St.  Rep.  515 ;   Morville  v.  Amer.  Tract  Society,  1877,  123 
Mass.  129 ;   25  Am.  Rep.  40 ;   Norton  v.  Derby  Nat.  Bank,  1882,  61 
N.  H.  589;  60  Am.  Rep.  334;  Tenn.  Ice  Co.  v.  Raine,  1901,  107  Tenn. 
151 ;   64  S.  W.  29. 

257 


§  161]  MISRELIANCE   ON   ULTRA   VIRES   CONTRACT       [Part  I 

A  few  cases  to  the  contrary  may  be  found.  In  at  least  one 
case  the  recovery  in  quasi  contract  of  money  paid  under  an 
ultra  vires  contract  of  loan  has  been  denied  upon  the  ground 
that  "  a  recovery  under  a  common  count  in  this  case,  would 
be  an  enforcement  of  a  void  contract,  as,  effectually  as 
if  it  had  been  under  a  special  count,  setting  forth  the 
contract."  1  This  is  the  same  difficulty  that  has  been  felt  by 
the  English  courts,  and  it  has  been  considered  in  the  discussion  of 
the  English  cases  (ante,  §  158).  In  another  case  it  has  been 
held  that  a  manufacturing  corporation  could  not  recover  the 
value  of  goods  delivered  to  a  railway  company  in  part  per- 
formance of  an  ultra  vires  contract  to  take  part  payment  in 
stock  of  the  railway  company,  because  the  benefit  was  con- 
ferred under  a  mistake  of  law.2  An  attempt  is  made,  in 
another  chapter  (ante,  §  35  et  seq.),  to  show  that  ignorance  or 
mistake  of  law  ought  not  to  bar  a  recovery  in  quasi  con- 
tract. Fortunately,  the  fallacious  maxim  that  every  one  is 
conclusively  presumed  to  know  the  law  has  rarely  been  appealed 
to  in  cases  arising  out  of  ultra  vires  contracts,  and  it  is  to  be 
hoped  that  the  decision  above  referred  to  will  not  be  followed. 

§161.  Enforcement  of  restitution  against  policy:  Ultra 
vires  contracts  of  municipal  corporations.  —  It  is  a  generally 
accepted  rule  of  policy  that  a  municipal  corporation  is  under 
no  obligation  to  make  restitution  for  a  benefit  received  under  an 
ultra  vires  contract  entered  into  by  its  officers,  in  case  such 
restitution  would  increase  the  burden  of  taxation  upon  the 
members  of  the  municipality : 

Thomas  v.  City  of  Richmond,  1870,  12  Wall.  (U.  S.)  349 : 
BRADLEY,  J.  (p.  356) :  "  But,  in  the  case  of  municipal  and  other 
public  corporations,  another  consideration  intervenes.  They 
represent  the  public,  and  are  themselves  to  be  protected  against 
the  unauthorized  acts  of  their  officers  and  agents,  when  it 

1  Grand  Lodge  v.  Waddill,  1860,  36  Ala.  313. 

2  Valley  R.  Co.  v.  Lake  Erie  Iron  Co.,  1888,  46  Oh.  St.  44  ;  18  N.  E. 
486 ;   1   L.   R.   A.  412.    And  see  In  re  Mutual,  etc.,  Ins.  Co.,   1899 
107  la.  143 ;  77  N.  W.  868. 

258 


Chap.  IX]  RESTITUTION   AGAINST   POLICY  [§161 

can  be  done  without  injury  to  third  parties.  This  is  necessary 
in  order  to  guard  against  fraud  and  peculation.  Persons  deal- 
ing with  such  officers  and  agents  are  chargeable  with  notice  of 
the  powers  which  the  corporation  possesses,  and  are  to  be  held 
responsible  accordingly."  l 

Where,  on  the  other  hand,  restitution  will  impose  no  burden 
upon  the  taxpayers,  a  recovery  in  quasi  contract  is  permitted. 
Instances  of  this  kind  are  found  in  cases  of  ultra  vires  contracts 
under  which  money  is  received  by  the  corporation  which 
either  remains  in  its  treasury  or  is  expended  for  legitimate 
corporate  purposes.2  This  rule  is  held  not  to  apply,  however, 
to  a  case  in  which  to  allow  a  recovery  would  be  to  accomplish 
the  very  purpose  of  the  ultra  vires  contract,  as  where  it  is  sought 


Litchfield  v.  Ballou,  1884,  114  U.  S.  190;  5  S.  Ct.  820; 
Citizens'  Bank  ».  City  of  Spencer,  1904,  126  la.  101  ;  101  N.  W.  643, 
645;  South  Covington  Dist.  v.  Kenton  Water  Co.,  1904,  117  Ky.  489; 
25  Ky.  Law  Rep.  1592  ;  78  S.  W.  420  ;  Agawan  Nat.  Bank  v.  South 
Hadley,  1880,  128  Mass.  503  ;  Bloomsburg  Land  Imp.  Co.  v.  Blooms- 
burg,  1906,  215  Pa.  St.  452  ;  64  Atl.  602. 

See  note  in  4  Columbia  Law  Rev.,  67  :  "  Municipal  corporations  stand 
in  particular  need  of  protection  against  their  officers.  In  order  to 
afford  this  protection  the  legislature  has  usually  defined  minutely  the 
powers  of  these  officers  and  the  manner  in  which  the  same  shall  be  ex- 
ercised. When  any  act  of  the  corporation,  through  its  officers,  will, 
directly  or  indirectly,  vary  in  kind  or  degree  the  burden  thus  authorized 
to  be  placed  upon  the  members  of  the  corporation,  public  policy 
demands  that  recovery  in  any  form  shall  be  denied.  If,  however,  rep- 
aration will  not  in  any  manner  affect  the  burden  upon  the  taxpayers 
the  ordinary  principles  of  quasi-contract  will  be  applied." 

2  Butts  County  v.  Jackson  Banking  Co.,  1908,  129  Ga.  801;  60 
S.  E.  149;  121  Am.  St.  Rep.  244;  Dill  v.  Wareham,  1844,  7  Mete. 
(Mass.)  438;  Leonard  v.  City  of  Canton,  1858,  6  George  (35  Miss.) 
189;  Long  v.  Lemoyne  Borough,  1908,  222  Pa.  St.  311;  71  Atl.  211, 
(In  First  Nat.  Bank  v.  City  of  New  Castle,  1909,  224  Pa.  St.  285  ;  73 
Atl.  331  ;  132  Am.  St.  Rep.  779,  recovery  was  denied  where  money  had 
been  advanced  to  the  city  treasurer  or  placed  to  his  official  account, 
the  treasurer  being  at  that  time  a  defaulter  :  Long  v.  Lemoyne  Borough, 
supra,  approved.)  ;  Thomson  v.  Town  of  Elton,  1901,  109  Wis.  589. 
See  also  Lea  v.  Board  of  Com'rs,  1902,  114  Fed.  744  ;  52  C.  C.  A.  376  ; 
Municipal  Security  Co.  v.  Baker  County,  1901,  39  Or.  396;  65  Pac. 
369,  (holding  that  where  a  county  has  received  personal  property  or 
land  under  an  ultra  vires  contract  the  vendor  may  recover  in  specie. 
Here,  though,  the  statute  of  limitations  had  run). 

259 


§  161]  MISRELIANCE   ON   ULTRA   VIRES   CONTRACT        [Part  I 

to  recover  money  paid  for  unauthorized  municipal  bonds  or 
notes  which  have  reached  maturity.1 

It  is  necessary  to  distinguish  between  a  benefit  for  which  a 
municipal  corporation  has  no  power  to  contract,  and  a  benefit 
for  which  it  has  the  power  to  contract  but  which  is  actually 
received  under  a  contract  ultra  vires  because  of  its  terms,  or  void 
because  of  non-compliance  with  some  formal  or  preliminary 
requirement  of  the  law,  or  because  of  an  agent's  want  of  author- 
ity. If  a  benefit  is  one  which  might  have  been  lawfully  ob- 
tained, restitution  in  value  would  not  impose  an  unauthorized 
burden  upon  the  taxpayers.  It  has  accordingly  been  held 
that  a  city  is  liable  for  the  value  of  the  use  of  a  water  plant 
the  lease  of  which  was  ultra  vires  because  of  a  condition  that 
the  lessor  should  construct  a  railroad;2  likewise,  that  a  city 
is  bound  to  pay  for  the  paving  of  streets  although  the  contract 
provided  for  payment  in  bonds  of  the  corporation  the  issue  of 
which  was  unauthorized  by  law.3  Whether  or  not  quasi 
contractual  obligation  arises  from  the  receipt  of  a  benefit  under  a 
contract  not  in  substance  or  in  terms  beyond  the  power  of  the 
corporation  to  enter  into,  but  void  because  of  non-compliance 
with  a  formal  or  preliminary  requirement  relating  to  its  forma- 
tion, is  a  question  upon  which  the  authorities  differ.4  Much 

1  Thomas  v.  City  of  Richmond,  1870,  12  Wall.  (U.  S.)  349;   Litch- 
field  v.  Ballou,  1884,  114  U.  S.  190 ;  5  S.  Ct.  820.     See  Luther  v.  Wheeler, 
1905,  73  S.  C.  83 ;   52  S.  E.  874 ;  4  L.  R.  A.  (N.  S.)  746,  (criticism  of 
this  view  by  WOOD,  J.). 

2  Higgins  v.  City  of  San  Diego,  1897,  118  Cal.  524;   45  Pac.  824; 
50  Pac.  670. 

3  Hitchcock  v.  Galveston,  1877,  96  U.  S.  341,  (recovery  on  the  con- 
tract  appears  to   have  been  allowed).     See  also   Chapman  v.  County 
of  Douglas,  1882,  107  U.  S.  348 ;   2  S.  Ct.  62 ;   City  of  Kansas  City  v. 
Wyandotte  Gas  Co.,  1900,  9  Kan.  App.  325 ;  61  Pac.  317,  (same  as  to 
lighting  contract). 

4  Allowing  a  Recovery:   Lincoln  Land  Co.  v.  Village  of  Grant,  1898, 
57  Neb.  70 ;    77  N.  W.  349,  (ordinance  void   for  defective  title :   ap- 
proved, Nebraska  Bitulithic  Co.  v.  City  of  Omaha,  1909,  84  Neb.  375 ; 
121  N.  W.  443) ;   Wentink  v.  Board  of  Freeholders,  1901,  66  N.  J.  L. 
65 ;    48  Atl.  609,   (failure  to  give  notice  to  lower  bidder  in  default 
before  awarding  contract  to  plaintiff) ;  Ward  v.  Town  of  Forest  Grove, 
1891,  20  Or.  355;  25  Pac.  1020,  (required  ordinance  wanting) ;   Mem- 
phis Gaslight  Co.  v.  City  of  Memphis,  1894,  93  Tenn.  612 ;   30  S.  W. 

260 


Chap.  IX]  RESTITUTION   AGAINST   POLICY  [§161 

depends,  it  is  submitted,  upon  the  purpose  of  the  requirement 
and  the  extent  to  which  it  is  disregarded.  If  the  irregularity 
is  such  as  to  deprive  the  municipality  of  the  protection  of  a 
safeguard  against  the  extravagance  or  corruption  of  its  officers 
—  as  a  substantial  failure  to  comply  with  a  requirement  that 
contracts  shall  be  let  to  the  lowest  bidder  after  due  publication 
of  notice 1  —  recovery  should  be  denied.  But  if  the  irregularity 
is  of  a  character  that  does  not  prejudice  or  endanger  the  interests 
of  the  municipality  —  as  a  failure  to  renew  in  writing,  as  re- 
quired by  law,  a  contract  for  gas  supply 2  —  recovery  should 
be  allowed. 
There  is  likewise  an  apparent  conflict  of  authority  as  to 

25,  (contract  not  in  writing).  See  also  Contra  Costa  Water  Co.  ». 
Breed,  1903,  139  Cal.  432;  73  Pac.  189,  (opinion  of  MCFAKLAND,  J.), 
For  a  good  discussion  of  this  distinction,  see  Bell  v.  Kirkland,  1907, 
102  Minn.  213;  113  N.  W.  271;  13  L.  R.  A.  (N.  S.)  793;  120  Am. 
St.  Rep.  621. 

Denying  a  Recovery:  Zottman  v.  San  Francisco,  1862,  20  Cal.  96; 
81  Am.  Dec.  96,  (required  publication,  etc.,  wanting) ;  Reichard  v. 
Warren  County,  1871,  31  la.  381,  (not  submitted  to  vote  of  people,  as 
required) ;  McCurdy  v.  County  of  Shiawassee,  1908,  154  Mich.  550 ; 
118  N.  W.  625,  (money  borrowed  without  authorization  by  vote  of 
people) ;  W.  W.  Cook  &  Son  v.  City  of  Cameron,  1910,  144  Mo.  App. 
137 ;  128  S.  W.  269,  (contract  not  reduced  to  writing  and  signed,  as 
required  by  statute) ;  McDonald  v.  Mayor,  1876,  68  N.  Y.  23 ;  23 
Am.  Rep.  144,  (required  certificate  of  necessity,  authorization  by 
council,  publication,  etc.,  wanting) ;  City  of  Bryan  v.  Page,  1879,  51 
Tex.  532 ;  32  Am.  Rep.  637,  (required  ordinance  wanting) ;  Paul  v. 
City  of  Seattle,  1905,  40  Wash.  294 ;  82  Pac.  601,  (required  ordinance 
wanting).  But  see  Moore  v.  Mayor,  1878,  73  N.  Y.  238;  29  Am. 
Rep.  134,  where  it  was  said  that  a  latent  irregularity  in  an  ordinance 
authorizing  a  contract  will  not  bar  a  recovery.  In  many  cases  it  has 
been  held,  contrary  to  principle,  that  a  contract  void  for  some  irregu- 
larity or  informality  in  its  execution  may  be  ratified  by  an  acceptance 
of  the  benefit  of  its  performance.  See  Abbott,  "Municipal  Corpo- 
rations," §  279  and  cases  cited. 

1  McDonald  v.  Mayor,  1876,  68  N.  Y.  23 ;   23  Am.  Rep.  144,  and 
other  cases  cited    supra;  City  of    Providence  v.  Providence  Electric 
Light  Co.,  1906,  122  Ky.  237;    91  S.   W.  664.     But   see    Peterson  v. 
City  of  Ionia,  1908,  152  Mich.  678;    116  N.  W.  562;   Nebraska  Bitu- 
lithic  Co.  v.  Omaha,  1909,  84  Neb.  375 ;    121  N.  W.  443. 

2  Memphis  Gaslight  Co.  v.  City  of  Memphis,  1894,  93  Tenn.  612 ; 
30  S.  W.  25.     But  see  W.  W.  Cook  &  Son  v.  City  of  Cameron,  1910, 
144  Mo.  App.  137 ;    128  S.  W.  269. 

261 


§101]  MISRELIANCE   ON   ULTRA   VIRES   CONTRACT       [Part  I 

whether  there  can  be  a  recovery  for  benefits  conferred  upon  a 
municipal  corporation  under  a  contract  void  for  want  of  author- 
ity in  the  officers  acting  or  professing  to  act  for  the  municipality.1 
But  here,  again,  the  circumstances  of  the  particular  case  are 
important.  In  general  it  would  seem  that  a  recovery  should  be 
allowed,  but  if  the  fact  that  the  contract  was  made  by  one  who 
had  no  authority  to  make  it  appears  to  have  deprived  the 
municipality  of  the  protection  of  safeguards  against  maladminis- 
tration, recovery  should  be  denied : 

Hague  v.  Philadelphia,  1865,  48  Pa.  St.  527:  AGNEW,  J. 
(p.  529) :  "  All  experience  teaches  the  utter  impossibility  of 
wholly  preventing  unfairness,  and  advantage  taken  in  the 
execution  of  public  contracts,  even  with  the  most  vigilant 
watchfulness  of  the  public  interest.  If,  in  addition,  courts  of 
justice  hold  that  public  servants  can  without  authority  bind  the 
public  for  extras,  even  in  proper  and  honest  cases,  they  es- 
tablish a  principle  which  will  greatly  add  to  the  demorali- 
zation of  public  contracts,  and  the  means  of  robbing  the 
treasury,  whenever  fraud  and  dishonesty  can  succeed  in  cover- 

1  Allowing  a  Recovery :  Chicago  v.  McKechney,  1903,  205  111.  372 ; 
68  N.  E.  954 ;  Central  Paving  Co.  v.  Mt.  Clemens,  1906,  143  Mich. 
259 ;  106  N.  W.  888 ;  Auerbach  v.  Salt  Lake  County,  1901,  23  Utah 
103 ;  63  Pac.  907 ;  90  Am.  St.  Rep.  685,  (here  there  had  been  bribery 
on  the  part  of  the  plaintiff's  assignor  and  the  contract  was  ultra  vires') ; 
Rice  v.  Ashland  County,  1902,  114  Wis.  130;  89  N.  W.  908. 

Denying  a  Recovery:  Fountain  v.  Sacramento,  1905,  1  Cal.  App. 
461 ;  82  Pac.  637 ;  Shaw  t>.  City  and  County  of  San  Francisco,  1910, 
13  Cal.  App.  547;  110  Pac.  149;  Otis  v.  Inhabitants  of  Stockton,  1884, 
76  Me.  506;  Baldwin  v.  Inhabitants  of  Prentiss,  1909,  105  Me.  469; 
74  Atl.  1038;  Bartlett  v.  Lowell,  1909,  201  Mass.  151 ;  87  N.  E.  195; 
Groton  Bridge,  etc.,  Co.  v.  Board  of  Suprs.,  1902,  80  Miss.  214 ;  31  So. 
711 ;  Burgin  v.  Smith,  1909,  151  N.  C.  561 ;  66  S.  E.  607;  Hague  v. 
Philadelphia,  1865,  48  Pa.  St.  527.  And  see  Floyd  County  v.  Allen, 
1910,  137  Ky.  575;  126  S.  W.  124;  27  L.  R.  A.  (N.  S.)  1125;  Floyd 
County  v.  Owego  Bridge  Co.,  1911,  143  Ky.  693 ;  137  S.  W.  237,  allow- 
ing the  plaintiff  to  remove  materials  furnished. 

In  Ohio,  the  legislature,  in  prescribing  how  and  by  whom  municipal 
contracts  should  be  made,  enacted  that  every  "contract,  agreement,  or 
obligation"  made  contrary  to  the  provisions  of  the  act  should  be  void 
as  against  the  corporation,  and  it  was  held  that  quasi  contractual 
obligations  were  included  in  the  prohibition.  City  of  Wellston  v. 
Morgan,  1901,  65  Ohio  St.  219;  62  N.  E.  127. 

262 


Chap.  IX]  RESTITUTION   AGAINST   POLICY  [§  161 

ing  up  the  wrong.  Now,  more  than  ever,  do  we  need  a  rigid 
enforcement  of  public  contracts,  and  a  stricter  moral  discipline, 
to  defeat  the  varied  plans  by  which  money  is  taken  from  the 
treasury  without  authority.  The  older  we  grow  as  a  people, 
the  more  systematized  and  difficult  of  detection  do  the  schemes 
become  for  plundering  the  public ;  and  among  them  all,  none 
are  more  prominent  or  successful  than  those  which  concern  con- 
tracts and  jobs." 


263 


CHAPTER   X 


MISRELIANCE  ON  CONTRACT  UNENFORCEABLE  BECAUSE  OF 
PLAINTIFF'S  BREACH 

§  162.  In  general. 

§  163  (I)  The  obligation  to  make  restitution  considered  upon  prin- 
ciple. 

§  164.  (1)  Misreliance  on  contract :  Assumption  of  risk. 

§  165.  Same :   Breach  of  condition  implied  in  law. 

§  166.  (2)  Retention  of  benefit  inequitable :  Effect  of  willful  breach. 

§  167.  Same :   The  doctrine  of  Britton  v.  Turner. 

§  168.  (a)  The  argument  as  to  inequality. 

§  169.  (6)  The  argument  as  to  injustice. 

§  170.  (c)  The  argument  from  analogous  cases. 

§  171.  (d)  The  argument  as  to  severability  of  contract. 

§  172.  (e)  Conclusion. 

§  173.  (II)  The  state  of  the  law. 

§  174.  (1)  Service  contracts. 

§  175.  (2)  Building  and  like  contracts. 

§  176.  (3)  Contracts  for  the  sale  of  goods. 

§  177.  (4)  Contracts  for  the  payment  of  money. 

§  178.  (Ill)  Measure  of  recovery. 

§  162.  In  general.  —  The  purpose  of  this  chapter  is  to  con- 
sider the  rights  of  one  who  has  partly  performed  a  contract, 
but  is  prevented  by  his  own  breach  from  enforcing  it.  There 
are  few  topics  which  exhibit  so  clearly  the  equitable  character 
of  quasi  contractual  obligations.  For,  notwithstanding  the 
plaintiff's  violation  of  his  legal  duty,  if  in  reliance  upon  the 
broken  contract  he  has  conferred  a  benefit  upon  the  defendant, 
and  the  circumstances  are  such  that  the  retention  of  the  benefit 
would  be  inequitable,  he  is  entitled  to  restitution.  Whether, 
in  a  given  case,  however,  the  plaintiff  relied  upon  his  contract 
or  assumed  the  risk  of  failure,  and  under  what  circumstances 
the  retention  of  the  benefit  would  be  inequitable,  are  questions 
upon  which  marked  differences  of  opinion  have  developed. 
The  decisions  are  in  such  confusion,  indeed,  that  it  will  be 

264 


Chap.  X]  MISRELIANCE   ON   CONTRACT  [§  164 

best  first  to  consider  the  topic  broadly  and  upon  principle,  and 
then  to  endeavor  to  ascertain  the  actual  state  of  the  law  in 
various  classes  of  cases. 

§  163.  (I)  The  obligation  to  make  restitution  considered 
upon  principle.  —  Two  objections  may  be  urged  against  the 
recognition  of  a  quasi  contractual  obligation  in  favor  of  one 
who  has  broken  his  contract.  One,  that  the  essential  element 
of  misreliance  upon  the  contract  is  wanting;  the  other,  per- 
tinent only  in  cases  of  willful  breach,  that  the  relief  of  one  who 
has  deliberately  violated  his  obligation  is  both  uncalled  for 
as  a  matter  of  justice  between  the  parties,  and  contrary  to 
sound  public  policy.  These  two  objections  will  be  considered 
in  the  order  named. 

§  164.  (1)  Misreliance  on  contract :  Assumption  of  risk.  — 
In  one  sense  a  contractor  always  "  assumes  the  risk  "  of  failure 
to  discharge  his  obligation.  For  if  he  commits  a  breach  he  will 
be  unable  to  enforce  his  contract  and  will  himself  be  liable  in 
damages.  In  reality,  the  risk  of  failure,  in  this  sense,  is  im- 
posed upon  him  by  law,  rather  than  assumed  by  him,  for  it 
makes  no  difference  whether  or  not  he  is  conscious  of  a  doubt 
as  to  his  ability  to  perform.  But  this  is  not  the  sort  of  "  assump- 
tion of  risk  "  that  negatives  the  element  of  misreliance  and 
bars  a  recovery  in  quasi  contract  (ante,  §  16).  To  have  such 
a  result  there  must  be  a  conscious  "  taking  of  a  chance."  It 
must  appear  that  the  contractor,  when  he  entered  into  the 
contract,  actually  contemplated  a  contingency,  which,  if  it  hap- 
pened, would  cause  him  to  violate  his  engagement,  and  never- 
theless contracted  without  protecting  himself  against  the  con- 
tingency. In  such  a  case  he  cannot  say,  when  the  contingency 
happens  and  he  commits  a  breach,  that  he  relied  upon  his 
ability  to  perform  and  the  consequent  enforceability  of  his 
contract.  He  deliberately  "  took  a  chance  "  that  his  contract 
might  become  unenforceable  by  the  happening  of  that  par- 
ticular contingency,  and  cannot  complain  if  his  venture  proved 
a  losing  one. 

An  illustration  may  serve  to  make  the  point  clearer.  Let 
it  be  supposed  that  A  is  about  to  contract  for  the  manufacture 

265 


§  164]  MISRELIANCE  ON  BROKEN  CONTRACT  [Part  I 

of  certain  machines  for  B.  The  delivery  of  all  the  machines 
within  four  months  is  a  condition  of  the  contract,  but  the 
price  to  be  paid  by  B  is  a  liberal  one.  A  is  unaware  of  any  facts 
that  will  prevent  him  from  getting  the  necessary  skilled  labor 
to  do  the  work  and  anticipates  no  trouble  in  that  direction. 
But  he  knows  of  certain  conditions  in  the  steel  market  that 
may  make  it  impossible  for  him  promptly  to  obtain  the  necessary 
materials.  In  view  of  the  attractive  terms  of  the  contract, 
however,  he  decides  to  "  take  a  chance  "  of  getting  the  materials. 
The  contract  is  duly  made,  and  after  part  performance  by  A, 
he  commits  a  breach.  Now,  if  the  breach  is  due  to  A's  inability 
promptly  to  secure  his  materials  —  a  contingency  which  he 
realized  might  happen  —  he  cannot  say  that  he  was  mistaken 
as  to  his  ability  to  perform  and  consequently  as  to  the  enforce- 
ability  of  his  contract.  He  deliberately  took  the  chance  of 
getting  materials,  and  lost.  There  is  no  injustice  in  denying 
him  relief.  Moreover,  to  allow  him  to  recover  the  value  of 
his  part  performance  would  be  to  encourage  the  reckless  assump- 
tion of  contractual  obligations.  If,  on  the  other  hand,  the 
breach  is  the  result  of  A's  inability  to  obtain  competent  labor  — 
a  contingency  wholly  unforeseen  by  him  —  he  may  truthfully 
claim  that  his  party  performance  was  in  reliance  upon  the 
contract.  He  did  not  consciously  "  take  a  chance  "  of  getting 
competent  workmen,  for  he  did  not  realize  the  possibility 
of  difficulty  in  that  direction.  He  did  not,  in  the  true  sense, 
"  assume  the  risk  "  of  failure  from  that  cause,  and  consequently, 
if  the  other  elements  of  quasi  contractual  obligation  are  present, 
he  should  be  granted  relief. 

In  England,  as  appears  in  the  chapter  dealing  with  benefits 
conferred  in  reliance  upon  contracts  which  turn  out  to  be  im- 
possible of  performance  (ante,  §  112),  the  view  is  taken  that 
the  existence  in  a  contract  of  a  condition  making  the  defendant's 
contractual  liability  depend  upon  complete  performance  by  the 
plaintiff  necessarily  predicates  such  an  assumption  by  the 
plaintiff  of  the  risk  of  failure,  from  any  cause  whatsoever,  as  to 
negative  misreliance  upon  the  contract.  It  is  accordingly 
held,  as  a  rule,  that  one  who  is  prevented  by  his  own  breach 

266 


Chap.  X]  BREACH   OF   IMPLIED   CONDITION  [§  165 

from  enforcing  a  contract  can  recover  nothing  in  quasi  contract.1 
Where  the  plaintiff's  default  is  due  to  such  impossibility  of 
performance  as  excuses  him  from  liability  for  damages,  it 
seems  clearly  erroneous,  as  is  elsewhere  explained  (ante,  §  112), 
to  raise  a  presumption  that  he  assumed  the  risk  of  the  after- 
event  which  made  performance  impossible.  Where  the  plain- 
tiff's default  is  not  legally  excusable  but  constitutes  an  action- 
able breach,  a  presumption  that  he  assumed  the  risk  of  the 
after-event  which  caused  the  breach  is  not  so  unreasonable. 
It  amounts  to  a  presumption  that  he  realized,  when  he  entered 
into  the  contract,  that  the  contingency  which  eventually 
brought  about  his  breach  might  arise.  But  even  in  the  case  of 
a  breach,  it  would  seem  fairer  to  assume,  in  the  absence  of  evi- 
dence to  the  contrary,  that  the  circumstances  leading  to  the 
default  were  unanticipated  at  the  time  of  the  formation  of  the 
contract. 

It  should  be  added,  perhaps,  that  an  express  provision  in 
the  contract  to  the  effect  that  the  promisor  assumes  the  risk 
of  inability  to  perform  his  engagement,  and  in  case  of  breach 
shall  have  no  right  to  recover  the  value  of  his  part  performance, 
would  conclusively  show  that  the  promisor  deliberately  "  took  a 
chance  "  of  failure,  whether  anticipated  by  him  or  not.  Thus, 
where  the  plaintiffs  contracted  to  do  some  threshing  for  the 
defendant  and  agreed  that  "  if  they  did  not  do  as  good  work  as 
any  machine  in  the  county  could  do  nothing  would  be  charged," 
it  was  properly  held  that  unless  the  plaintiffs  performed  accord- 
ing to  the  terms  of  their  contract  they  could  recover  nothing.2 

§  165.  Same  :  Breach  of  condition  implied  in  law.  —  Professor 
Keener  has  endeavored  to  establish  a  distinction  between  con- 
ditions expressed  in  the  contract  or  implied  in  fact  and  con- 

1  Sinclair  v.  Bowles,  1829,  9  Barn.  &  Cr.  92,  (contract  to  repair  a 
chandelier  partly  performed) ;  Munro  v.  Butt,  1858,  8  El.  &  Bl.  738, 
(building  contract  to  be  completed  by  a  specified  time) ;    Button  v. 
Thompson,  1869,  L.  R.  4  C.  P.  330,  (service  contract) ;  Forman  &  Co. 
Proprietary  v.  The  Ship  "  Liddesdale,"  [1900]  A.  C.  190,  (repair  con- 
tract).    In  the   case  of  sales  of  goods,  however,  a  different  result  is 
reached.     See  post,  §  176. 

2  Crapson  v.  Wallace  Bros.,  1897,  71  Mo.  App.  682,  684. 

267 


§  165]  MISRELIANCE   ON  BROKEN  CONTRACT  [Part  I 

ditions  implied  in  law,  holding  that  the  condition  implied  in 
law  is  not  a  genuine  condition,  i.e.  a  condition,  which  represents 
the  intention  of  the  parties,  but  a  fiction  of  the  law  of  con- 
tract, and  therefore  that  it  should  in  no  case  be  permitted  to 
affect  one's  quasi  contractual  rights : * 

"That  conditions  implied  in  law  are  not  true  conditions  is 
as  evident  on  reflection  as  that  a  quasi-contract  is  not  a  con- 
tract. A  true  condition  is  as  much  dependent  upon  actual 
intention  as  is  a  true  contract,  and  conditions  implied  in  law 
are  only  found  where  a  party  to  a  contract  failed  to  protect 
himself  by  the  insertion  of  conditions,  express  or  implied  in 
fact.  A  condition  implied  in  law  being  then  a  creature  of  the 
law  as  distinguished  from  the  creation  of  the  parties  to  the 
contract,  cannot  be  properly  regarded  as  a  true  condition.  .  .  . 
And  as  the  law  has  imposed  these  conditions  upon  the  plain- 
tiff in  favor  of  the  defendant  simply  for  the  purpose  of  reach- 
ing equitable  results,  the  court  creating  this  condition  should 
be  at  liberty,  if  it  is  deemed  desirable,  to  create  an  obligation 
upon  equitable  principles  in  favor  of  the  plaintiff  against  the 
defendant,  it  being  one  thing  to  say  that  the  plaintiff  shall  not 
recover  against  the  defendant  under  the  contract,  and  quite 
another  thing  to  say  that  he  shall  not  recover  in  any  form 
whatever."  2 

1  "  Quasi-Contracts,"  p.  225. 

3  Professor  Keener's  contention  that  conditions  implied  in  law  do 
not  represent  the  actual  intent  of  the  parties  is  supported  by  Profes- 
sors Williston  and  Costigan.  See  7  Col.  Law.  Rev.  151,  152.  "They 
are  conditions,"  says  Professor  Costigan,  "which  rest  not  on  any 
intention  which  the  parties  had  but  on  that  fair  dealing  which  the 
court  should  require  as  between  litigants."  Professor  Harriman, 
on  the  other  hand,  says,  in  his  treatise  on  "Contracts"  (§  315) :  "In- 
ternal conditions  are  always  gathered  from  the  contract  itself,  and 
when  they  are  implied  by  the  law  they  are  always  implied  because  the 
Jaw  supposes  that  the  intention  of  the  parties  is  to  treat  a  given  fact 
as  a  condition,  even  though  they  have  not  manifested  that  intention 
in  express  words.  The  fact  that  the  court  always  tries  to  discover 
the  intention  of  the  parties  by  looking  at  the  entire  contract,  and  that 
such  intention  is  the  sole  rule  for  determining  whether  a  given  fact 
is  or  is  not  a  condition,  shows  clearly  that  an  internal  condition  im- 
plied by  law  is  just  as  much  a  part  of  the  real  contract  of  the  parties 
as  if  the  condition  had  been  set  forth  in  express  words." 

268 


Chap.  X]        RETENTION   OF   BENEFIT   INEQUITABLE  [§  166 

If  the  premise  be  true  that  conditions  implied  in  law  do  not 
rest  upon  the  actual  intent  of  the  parties  as  inferred  from  the 
express  terms  of  the  contract,  there  is  no  basis  whatever  for  the 
claim  that  a  contractor  assumes  the  risk  of  a  failure  to  perform 
such  conditions.  And  it  is  believed  that  the  premise  ought  to 
be  true.  That  is  to  say,  the  courts  ought  to  recognize  the  fu- 
tility of  attempting  to  ascertain  the  unexpressed  intention  of  the 
parties  —  to  say  nothing  of  the  probability  that  they  had  no 
intention  whatever  in  the  matter  —  and  treat  the  condition  as  a 
fiction  invented  in  the  interest  of  fair  dealing.  But  the  prevail- 
ing judicial  dogma,  it  is  feared,  is  that  conditions  implied  in  law 
are  genuine  conditions,  resting  upon  the  actual  intent  of  the 
parties,  as  ascertained  by  an  examination  of  the  entire  contract, 
and  unless  this  view  is  abandoned,  any  distinction  between 
express  and  implied  conditions,  as  to  their  effect  upon  quasi 
contractual  rights,  is  impossible. 

§  166.  (2)  Retention  of  benefit  inequitable :  Effect  of  willful 
breach.  —  It  is  a  general  rule,  in  cases  of  misreliance,  that  al- 
though all  the  other  elements  of  obligation  are  present,  proof  of 
serious  misconduct  by  the  plaintiff  toward  the  defendant  will 
be  held  to  justify  a  refusal  to  make  restitution  (ante,  §  21). 
One  of  the  forms  of  misconduct  which  ought,  upon  principle, 
to  be  so  regarded  is  the  willful  breach  of  a  contract : 

Stark  v.  Parker,  1824,  2  Pick.  (Mass.)  267 ;  13  Am.  Dec.  425 : 
Action  to  recover  the  value  of  services  rendered  under  a  con- 
tract which  plaintiff  without  cause  had  abandoned.  LINCOLN, 
J.  (p.  271) :  "It  cannot  but  seem  strange  to  those  who  are  in 
any  degree  familiar  with  the  fundamental  principles  of  law,  that 
doubts  should  ever  be  entertained  upon  a  question  of  this 
nature.  Courts  of  justice  are  eminently  characterized  by  their 
obligation  and  office  to  enforce  the  performance  of  contracts, 
and  to  withhold  aid  and  countenance  from  those  who  seek, 
through  their  instrumentality,  impunity  or  excuse  for  the 
violation  of  them.  And  it  is  no  less  repugnant  to  the  well- 
established  rules  of  civil  jurisprudence,  than  the  dictates  of 
moral  sense,  that  a  party  who  deliberately  and  understand- 
ingly  enters  into  an  engagement  and  voluntarily  breaks  it, 

269 


§  167]  MISRELIANCE  ON   BROKEN  CONTRACT  [Part  I 

should  be  permitted  to  make  that  very  engagement  the  founda- 
tion of  a  claim  to  compensation  for  services  under  it." 

Haslack  v.  Mayers,  1857,  26  N.  J.  L.  284 :  Indebitatus  assump- 
sit  to  recover  the  value  of  nine  shares  of  stock  transferred  by  the 
plaintiff  to  the  defendant  in  part  performance  of  a  contract 
for  the  purchase  of  the  defendant's  stock  of  groceries.  The 
plaintiff  subsequently  refused  to  complete  the  purchase.  POTTS, 
J.  (p.  290):  "The  plaintiff  here  has  deliberately  broken  his 
covenant  with  the  defendant;  and  without  the  shadow  of  a 
pretext  for  having  done  so,  asks,  at  the  hands  of  a  court  of 
justice,  to  be  remunerated  in  money  for  the  stock  he  delivered 
to  the  defendant  voluntarily  in  part  performance  of  that  cove- 
nant. For  the  court  to  aid  him,  would  be  to  lend  its  aid  to  an 
act  of  bad  faith.  There  is  no  hardship  in  the  case.  Let  him 
perform  his  contract,  and  he  will  receive  the  remuneration  he 
stipulated  for;  or,  if  it  be  now  too  late,  the  loss  is  the  conse- 
quence of  his  own  act." 

The  weight  of  authority,  as  will  be  seen  later  (post,  §  174  et 
seq.},  is  in  accord  with  principle,  though  the  cases  are  in  confusion, 
and  the  distinction  between  the  willful  contract  breaker  and  one 
who  honestly  endeavors  to  perform  but  fails  because  of  want  of 
skill,  or  for  other  reasons  not  affecting  good  faith,  is  frequently 
overlooked. 

§  167.  Same :  The  doctrine  of  Britton  v.  Turner.  —  The  rule 
of  no  recovery  for  the  willful  contract  breaker  was  challenged  in 
the  now  famous  New  Hampshire  case  of  Britton  v.  Turner,1 
in  which  it  was  held  that  one  who  voluntarily  abandons  a  con- 
tract of  service  may  recover  to  the  extent  of  the  benefit  derived 
by  his  employer  from  his  part  performance,  after  deducting  the 
damages  resulting  from  the  plaintiff's  breach.  The  decision  has 
been  followed  in  other  States  (post,  §  174  et  seq.}.  Professor 
Scott,  while  conceding  that  the  weight  of  authority  is  against  it, 
declares  that  "  the  reason  of  the  thing  and  the  trend  of  legal 
development  are  clearly  in  favor  of  it  "  ; 2  and  Judge  DILLON,  in 
McClay  v.  Hedge,3  says :  "  That  celebrated  case  has  been  criti- 

1  1834,  6  N.  H.  481 ;  26  Am.  Dec.  713. 

2  "Cases  on  Quasi-Contracts,"  p.  761,  n. 
•  1864,  18  la.  66,  68. 

270 


Chap.  X]  DOCTRINE   OF   BRITTON   V.   TURNER  [ 

cized,  doubted,  and  denied  to  be  sound.  It  is  frequently  said  to 
be  good  equity,  but  bad  law.  Yet  its  principles  have  been 
gradually  winning  their  way  into  professional  and  judicial 
favor.  It  is  bottomed  on  justice,  and  is  right  upon  principle, 
however  it  may  be  upon  the  technical  and  more  illiberal  rules 
of  the  common  law,  as  found  in  the  older  cases."  The  case  has 
provoked  so  much  discussion  and  has  such  a  considerable  fol- 
lowing that  it  cannot  be  passed  without  careful  examination. 

The  chief  grounds  of  the  decision,  gathered  from  the  somewhat 
lengthy  opinion  of  the  court,  will  be  separately  stated  and  dis- 
cussed. 

§  168.  (a)  The  argument  as  to  inequality.  —  The  first  argu- 
ment advanced  is  that  the  rule  denying  a  recovery  in  quasi 
contract  to  one  who  voluntarily  fails  to  perform  a  contract  of 
service  (which,  the  court  concedes,  "  has  been  considered  the 
settled  rule  of  law  ")  operates  unequally  in  that  the  longer  the 
plaintiff  serves  the  more  he  is  compelled  to  suffer  for  the  breach. 
Says  the  court : : 

"A  party  who  contracts  to  perform  certain  specified  labor 
and  who  breaks  his  contract  in  the  first  instance,  without  any  at- 
tempt to  perform  it,  can  only  be  made  liable  to  pay  the  damages 
which  the  other  party  has  sustained  by  reason  of  such  non- 
performance,  which  in  many  instances  may  be  trifling  —  where- 
as a  party  who  in  good  faith  has  entered  upon  the  performance 
of  his  contract,  and  nearly  completed  it,  and  then  abandoned 
the  further  performance  —  although  the  other  party  has  had 
the  full  benefit  of  all  that  has  been  done,  and  has  perhaps  sus- 
tained no  actual  damage  —  is  in  fact  subjected  to  a  loss  of  all 
which  has  been  performed,  in  the  nature  of  damages  for  the  non- 
fulfillment of  the  remainder,  upon  the  technical  rule,  that  the 
contract  must  be  fully  performed  in  order  to  a  recovery  of  any 
part  of  the  compensation." 

The  inequality  of  the  operation  of  the  doctrine  denying  a 
recovery  may  be  conceded.  And  if  the  doctrine  rested,  as  the 
court  seems  to  believe  it  rests,  "  upon  the  technical  rule  that  the 

1  At  page  486. 
271 


§  170]  MISRELIANCE  ON  BROKEN  CONTRACT  [Part  I 

contract  must  be  fully  performed  in  order  to  a  recovery  of  any 
part  of  the  compensation,"  it  might  very  properly  be  challenged. 
But  it  rests  upon  firmer  ground,  for  the  recovery  is  or  ought  to 
be  denied  not  because  the  contract  has  not  been  fully  performed, 
but  because  it  has  been  willfully  broken.  Clearly,  the  willful 
contract  breaker  is  not  to  be  given  the  right  to  recover,  merely 
because  a  denial  of  such  right  may  cause  him  greater  loss  if  he 
performs  part  of  his  engagement  than  if  he  disregards  it  from  the 
beginning,  or  because  such  denial  may  result  in  a  greater  en- 
richment of  the  defendant  in  case  of  abandonment  after  part 
performance  than  in  case  of  complete  performance  of  the  en- 
gagement. Such  inequalities  in  the  operation  of  the  rule  may  be 
regrettable,  but  one  whose  hands  are  soiled  by  willful  wrongdoing 
is  hardly  in  a  position  seriously  to  complain  of  them. 

§  169.  (6)  The  argument  as  to  injustice.  —  The  second  ground 
of  decision  is  that  the  rule  denying  a  recovery  is  unjust  in  that 
its  effect  is  to  enable  the  defendant  to  retain  a  sum  in  excess  of 
adequate  compensatory  damages  for  the  plaintiff's  breach.  In 
the  words  of  the  court,1  the  defendant  "  may  receive  much  more 
by  the  breach  of  the  contract,  than  the  injury  which  he  has  sus- 
tained by  such  breach,  and  more  than  he  could  be  entitled  to 
were  he  seeking  to  recover  damages  by  an  action." 

This  is  perhaps  the  strongest  argument  that  can  be  urged 
against  the  rule.  But  when  it  is  remembered  that  the  plaintiff's 
position  is  the  direct  consequence  of  a  willful  and  inexcusable 
violation  of  his  legal  and  moral  duty  to  the  defendant,  it  is  diffi- 
cult to  feel  that  the  result  complained  of  is  harsh  or  unjust. 
Better  far  that  the  innocent  defendant  should  profit  by  the 
breach  than  that  the  guilty  plaintiff  should  be  given  a  remedy 
in  spite  of  it.  Moreover,  even  if  some  hardship  to  the  plaintiff 
were  conceded,  the  argument,  it  is  submitted,  would  be  distinctly 
outweighed  by  the  consideration  that  the  denial  of  relief  must 
have  a  salutary  effect  in  discouraging  the  willful  breach  of  con- 
tractual obligations. 

§  170.  (c)  The  argument  from  analogous  cases.  —  The  third 
point  made  by  the  court  is  that  the  case  of  service  contracts  is 

1  At  page  487. 
272 


Chap.  X]  DOCTRINE   OF   BRITTON   V.   TURNER  [§  171 

not  distinguishable  from  those  of  building  and  sales  contracts, 
in  which  one  who  commits  a  breach  is  permitted  to  recover 
in  quasi  contract  the  value  of  the  benefit  conferred  by  part 
performance : 1 

"  The  party  who  contracts  for  labor  merely,  for  a  certain 
period,  does  so  with  full  knowledge  that  he  must,  from  the  nature 
of  the  case,  be  accepting  part  performance  from  day  to  day,  if 
the  other  party  commences  the  performance,  and  with  knowl- 
edge also  that  the  other  may  eventually  fail  of  completing  the 
entire  term.  If  under  such  circumstances  he  actually  receives 
a  benefit  from  the  labor  performed,  over  and  above  the  damage 
occasioned  by  the  failure  to  complete,  there  is  as  much  reason 
why  he  should  pay  the  reasonable  worth  of  what  has  thus  been 
done  for  his  benefit,  as  there  is  when  he  enters  and  occupies  the 
house  which  has  been  built  for  him,  but  not  according  to  the 
stipulations  of  the  contract,  and  which  he  perhaps  enters,  not 
because  he  is  satisfied  with  what  has  been  done,  but  because 
circumstances  compel  him  to  accept  it  such  as  it  is,  that  he  should 
pay  for  the  value  of  the  house." 

As  to  this  argument  it  need  only  be  said  that  the  analogy 
relied  upon  by  the  court  fails  utterly,  in  that  none  of  the  cases 
of  building  and  sales  contracts  cited  in  the  opinion  appears  to 
be  a  case  of  willful  breach.  And  the  distinction,  while  very 
frequently  overlooked,  is  a  vital  one. 

§  171.  (d)  The  argument  as  to  sever  ability  of  contract.  —  The 
fourth  and  final  ground  of  decision  is  that  contracts  of  service, 
such  as  the  one  before  the  court,  are  usually  intended  by  the 
parties  to  entitle  the  laborer  to  compensation  for  services  ren- 
dered though  he  quits  before  the  expiration  of  the  contract  period, 
and  that  in  the  absence  of  express  stipulation  to  the  contrary 
they  should  be  so  interpreted : 2 

"  In  fact  we  think  the  technical  reasoning,  that  the  performance 
of  the  whole  labor  is  a  condition  precedent,  and  the  right  to 
recover  anything  dependent  upon  it  —  that  the  contract  being 
entire  there  can  be  no  apportionment  —  and  that  there  being 

1  At  page  489.  «  At  page  493. 

273 


§  174]  MISRELIANCE   ON  BROKEN  CONTRACT  [Part  I 

an  express  contract  no  other  can  be  implied,  even  upon  the 
subsequent  performance  of  service  —  is  not  properly  applicable 
to  this  species  of  contract,  where  a  beneficial  service  has  been 
actually  performed ;  for  we  have  abundant  reason  to  believe, 
that  the  general  understanding  of  the  community  is,  that  the 
hired  laborer  shall  be  entitled  to  compensation  for  the  service 
actually  performed,  though  he  do  not  continue  the  entire 
term  contracted  for,  and  such  contracts  must  be  presumed  to 
be  made  with  reference  to  that  understanding,  unless  an  express 
stipulation  shows  the  contrary." 

The  answer  to  this  argument  is  obvious.  If  the  court  really 
believed  in  its  extraordinary  theory  as  to  the  severability  of  the 
contract,  it  should  have  allowed  a  recovery  on  the  contract,  and 
there  would  then  have  been  no  occasion  to  appeal  to  quasi 
contractual  principles.  In  another  part  of  the  opinion,  how- 
ever, the  court  says : 1  "  It  is  clear,  then,  that  he  is  not  entitled 
to  recover  upon  the  contract  itself,  because  the  service,  which 
was  to  entitle  him  to  the  sum  agreed  upon,  has  never  been  per- 
formed." 

§  172.  (e)  Conclusion.  —  In  conclusion,  then,  all  of  the  reasons 
upon  which  the  decision  is  based  appear  to  be  either  inadequate 
or  unsound.  Even  the  court  by  which  it  was  handed  down 
admitted,  in  a  later  case,  that  it  had  a  "  direct  tendency  to  the 
willful  and  careless  violation  of  express  contracts  fairly  entered 
into." 2  Considerations  both  of  justice  and  of  policy  forbid  its 
approval. 

§  173.  (II)  The  state  of  the  law.  —  The  right  of  one  who  has 
violated  his  contract  having  been  considered  upon  principle, 
it  becomes  necessary  to  examine  the  authorities.  For  the  sake 
of  convenience,  the  cases  arising  from  various  types  of  contract 
—  (1)  service  contracts,  (2)  building  or  working  contracts, 
(3)  contracts  for  the  sale  of  goods,  and  (4)  contracts  for  the 
payment  of  money  —  will  be  separately  considered. 

§  174.  (1)  Service  contracts.  —  By  a  very  pronounced  weight 
of  authority,  an  employee  who  has  willfully  abandoned  his 

1  At  page  486. 

2  WOODS,  C.J.,  in  Davis  v.  Harrington,  1855,  30  N.  H.  517,  529. 

274 


Chap.  X]  SERVICE   CONTRACTS  [§  174 

employment  is  without  a  remedy  against  his  employer.1  There 
are  several  States,  however,  which  follow  the  case  of  Britton  v. 
Turner,2  heretofore  considered  (ante,  §  167  et  seq.),  and  allow 
the  employee  to  recover  the  value  of  his  part  performance,  less 
the  damages  resulting  from  his  breach.3 

As  to  the  rights  of  an  employee  discharged  for  good  cause 
there  is  a  closer  division  of  authority.4  In  principle  it  would 
seem  that  if  the  cause  of  discharge  involves  a  breach  of  faith  by 

1  Henderson  v.  Stiles,  1853,  14  Ga.  135 ;   Hansell  v.  Erickson,  1862, 
28  111.  257 ;    Hofstetter  v.  Gash,  1902,  104  111.  App.  455 ;    Callahan  v. 
Stafford,  1866,  18  La.  Ann.  556 ;  Miller  v.  Goddard,  1852,  34  Me.  102  ; 
56  Am.  Dec.  638;    Olmstead  v.  Beale,  1837,  19  Pick.   (Mass.)  528; 
Davis  v.  Maxwell,  1847,  12  Mete.  (Mass.)  286;  Nelichka  v.  Esterly, 
1882,  29  Minn.  146 ;    12  N.  W.  457 ;    Timberlake  v.  Thayer,  1894,  71 
Miss.  279;   14  So.  446;  24  L.  R.  A.  231 ;   Earp  v.  Tyler,  1881,  73  Mo. 
617;   Mather  v.  Brokaw,  1881,  43  N.  J.  L.  587;   Natalizzio  v.  Valen- 
tino, 1904,  71  N.  J.  L.  500 ;   59  Atl.  8 ;   McMillan  v.  Vanderlip,  1815, 
12  Johns.   (N.  Y.)  165;    7  Am.  Dec.  299;    Lantry  v.  Parks,  1827,  8 
Cow.  (N.  Y.)  63 ;    Seaburn  v.  Zachman,  1904,  99  App.  Div.  218 ;    90 
N.  Y.  Supp.  1005;   Larkin  v.  Buck,  1860,  11  Ohio  St.  561 ;   Steeples  v. 
Newton,  1879,  7  Or.  110;  33  Am.  Rep.  705;   Hughes  v.  Cannon,  1853, 
1  Sneed  (33  Tenn.)  622 ;  Winn  v.  Southgate,  1845,  17  Vt.  355 ;  Diefen- 
back  v.  Stark,  1883,  56  Wis.  462 ;   14  N.  W.  621 ;   43  Am.  Rep.  719. 

2  1834,  6  N.  H.  481 ;   26  Am.  Dec.  713. 

3  Pixler  v.  Nichols,  1859,  8  la.  106 ;  74  Am.  Dec.  298 ;  Byerlee  ». 
Mendel,  1874,  39  la.  382 ;    Porter  v.  Whitlock,  1909,  142  la.  66 ;    120 
N.  W.  649 ;   Duncan  v.  Baker,  1878,  21  Kan.  99 ;  Murphy  v.  Sampson, 
1902,  2  Neb.  (Unof.)  297;    96  N.  W.  494;    Bedow  v.  Tonkin,  1894, 
5  S.  D.  432  ;  59  N.  W.  222  ;  Carroll  v.  Welch,  1861,  26  Tex.  147.     And 
see   Chamblee  v.  Baker,  1886,  95  N.  C.  98. 

4  Recovery  not  allowed:    Turner  v.  Robinson,  1833,  5  Barn.  &  Ad. 
789;    Ridgway  v.  Hungerford    Market  Co.,  1835,  3    Ad.  &  El.  171; 
Hartman  v.  Rogers,  1886,  69  Cal.  643;    11  Pac.  581;    (see  Cal.  Civil 
Code,  §  2002);    Posey  v.  Garth,  1841,  7  Mo.  94;    37  Am.  Dec.  183; 
Lindner  v.  Cape  Brewery,  etc.,  Co.,  1908,  131  Mo.  App.  680;  111  S.  W. 
600 ;    (cf.  Anstee  v.  Ober,  1887,  26  Mo.  App.  665) ;    Lane  v.  Phillips, 
1859,  6  Jones'  L.  (51  N.  C.)  455,  (cf.  Pullen  v.  Green,  1876,  75  N.  C. 
215,  218). 

Recovery  allowed :  Newman  v.  Reagan,  1879,  63  Ga.  755 ;  Abend- 
post  Co.  v.  Hertel,  1896,  67  111.  App.  501 ;  Fuqua  v.  Massie,  1894,  95 
Ky.  387;  25  S.  W.  875;  Lawrence  v.  Gullifer,  1854,  38  Me.  532; 
Robinson  v.  Sanders,  1852,  2  Cushm.  (24  Miss.)  391 ;  Byrd  v.  Boyd, 
1827,  4  McCord  (S.  C.)  246;  17  Am.  Dec.  740;  Massey  v.  Taylor, 
Wood  &  Co.,  1868,  5  Coldw.  (45  Tenn.)  447 ;  98  Am.  Dec.  429  ;  Hilde- 
brand  v.'Amer.  Fine  Art  Co.,  1901,  109  Wis.  171 ;  85  N.  W.  268;  53 
L.  R.  A.  826. 

275 


§  174]  MISRELIANCE  ON   BROKEN  CONTRACT  [Part  I 

the  employee  he  should  be  regarded  as  no  better  than  one  who 
willfully  abandons  his  engagement;  but  if  the  discharge  is  due 
to  the  employee's  want  of  skill  or  strength  or  judgment  he  should 
be  permitted  to  recover.  This  distinction  has  received  little 
recognition  in  the  decisions,  however,  and  there  are  not  a  few 
cases  in  which  an  employee  discharged  for  deliberate  misconduct 
has  been  afforded  relief. 

If  an  employee  neither  willfully  abandons  his  employment,  nor 
is  discharged  by  his  employer,  but  nevertheless  fails  to  satisfy 
the  requirements  of  his  contract,  the  same  test  of  good  faith 
should  be  applied.  Thus,  if  he  is  discovered  to  have  deliber- 
ately disobeyed  the  instructions  of  his  employer  or  to  have  de- 
liberately deceived  or  defrauded  him,  he  should  be  denied  com- 
pensation for  his  labor.  There  are  cases  in  which  it  is  so  held,1 
although  in  jurisdictions  which  allow  a  recovery  by  one  who  has 
been  discharged  for  deliberate  misconduct,  relief  would  prob- 
ably be  afforded.  If,  on  the  other  hand,  the  employee's  failure 
is  the  result  of  some  mistake  of  judgment,  or  of  want  of  skill,  or 
of  some  untoward  circumstance,  there  is  no  reason  why  he 
should  be  denied  relief. 

In  Vermont  it  is  well  established  that  one  who  violates  a 
condition  of  his  contract  is  not  entitled  to  recover  for  part  per- 
formance.2 But  the  rule  appears  to  have  been  regarded  as  one 
of  severe  hardship,  and  it  has,  been  limited  in  its  application  to 
"  contracts  for  service  for  a  definite  time,  and  those  which  are 
incapable  of  reasonable  apportionment,  unless  they  provide  for 
a  forfeiture  of  all  benefit  when  not  fully  performed."  3  Accord- 
ingly, it  has  been  held  that  one  who  abandons  a  contract  to  make 
staves  at  a  specified  price  per  piece,4  or  to  clear  land  at  a  price 

1  Prescott  v.  White,   1885,   18  111.  App.  322 ;    World's  Columbian 
Exposition  v.  Liesegang,  1894,  57  111.  App.  594;    Sipley  v.  Stickney, 
1906,  190  Mass.  43;   76  N.  E.  226;   5  L.  R.  A.  (N.  S.)  469;    112  Am. 
St.  Rep.  309 ;   Peterson  v.  Mayer,  1891,  46  Minn.  468 ;  49  N.  W.  245 ; 
13  L.  R.  A.  72. 

2  St.  Albans  Steamboat  Co.  v.  Wilkins,  1836,  8  Vt.  54 ;    Ripley  v. 
Chipman,  1841,  13  Vt.  268;   Forsyth  ».  Hastings,  1855,  27  Vt.  646. 

3  Jordan  v.  Fitz,  1884,  63  N.  H.  227,  228. 

4  Booth  v.  Tyson,  1843,  15  Vt.  515. 

276 


Chap.  X]  BUILDING   AND   LIKE   CONTRACTS  [§  175 

per  acre,1  or  to  haul  lumber  at  a  price  per  thousand,2  may  re- 
cover for  his  part  performance  at  the  contract  rate,  after  de- 
ducting the  damages  resulting  from  his  breach. 

§  175.  (2)  Building  and  like  contracts.  —  Under  what  is 
known  as  the  doctrine  of  substantial  performance  —  a  doctrine 
which  has  its  most  frequent  application  in  cases  of  building  and 
like  contracts  —  a  contractor  who  in  good  faith  endeavors  to 
perform  his  contract  in  full  and  who  succeeds  in  performing  it 
substantially,  though  not  in  strict  compliance  with  its  require- 
ments, is  allowed  in  many  jurisdictions  to  recover  the  contract 
price,  less  compensation  to  the  defendant  for  defects  in  the 
performance.3  The  action,  in  these  cases,  is  on  the  contract 
itself,  and  the  obligation  is  in  no  sense  quasi  contractual. 

In  most  jurisdictions  it  is  rightly  held  that  there  can  be  no 
quasi  contractual  obligation  in  favor  of  a  builder  or  other 
independent  contractor  who  has  willfully  abandoned  his  en- 
gagement or  wilfully  departed  from  its  terms.4  But  in  a 

1  Dyer  v.  Jones,  1836,  8  Vt.  205. 

2  Jordan  v.  Fitz,  1884,  63  N.  H.  227,  (applying  Vermont  law). 

3  Mitchell  v.  Caplinger,  1911,  97  Ark.  278;    133  S.  W.  1032;  Keeler 
v.  Herr,  1895,  157  111.  57;    41  N.  E.  750;    Elliott  v.  Caldwell,  1890, 
43  Minn.  357  ;  45  N.  W.  845 ;  9  L.  R.  A.  52 ;  Anderson  v.  Todd,  1898, 
8  N.  D.  158 ;   77  N.  W.  599 ;   Nolan  v.  Whitney,  1882,  88  N.  Y.  648 ; 
Spence  v.  Ham,  1900,  163  N.  Y.  220 ;   57  N.  E.  412 ;  51  L.  R.  A.  238 ; 
Foeller  v.  Heintz,  1908,  137  Wis.  169;    118  N.  W.  543;   24  L.  R.  A. 
(N.  S.)  327.     For  additional  cases,  see  30  Am.  &  Eng.  Ency.  of  Law 
(2d  ed.)  1221,  n.  4.     And  see  article  by  Professor  Beale,  "The  Measure 
of  Recovery  upon  Implied  and  Quasi-Contracts,"  19  Yale  Law  Journal 
609. 

4  Sumpter  v.  Hedges,  [1898]  1  Q.  B.  673 ;  Mawxell  &  Delahomme  v. 
Moore,  1909,  163  Ala.  490 ;   50  So.  882 ;    Fish  v.  Correll,  1906,  4  Cal. 
App.  521 ;   88  Pac.  489 ;  McGonigle  v.  Klein,  1895,  6  Colo.  App.  306 ; 
40  Pac.  465;    Gill  v.  Volger,  1879,  52  Md.  663;    Elliot  v.  Caldwell, 
1890,  43  Minn.  357 ;  45  N.  W.  845 ;  9  L.  R.  A.  52 ;  Johnson  v.  Fehse- 
feldt,  1908,  106  Minn.  202;   118  N.  W.  797;  20  L.  R.  A.  (N.  S.)  1069, 
(threshing  contract) ;  Wooten  v.  Reed,  1844,  2  Smedes  &  M.  (10  Miss.) 
585 ;   Stroeh  v.  McClintock,  1908,  128  Mo.  App.  368 ;   107  S.  W.  416 ; 
Jennings  v.  Camp,  1816,  13  Johns.  (N.  Y.)  94 ;  7  Am.  Dec.  367,  (con- 
tract to  clear  and  fence  land) ;   Cunningham  v.  Jones,  1859,  20  N.  Y. 
486 ;   Spence  v.  Ham,  1900,  163  N.  Y.  220 ;  57  N.  E.  412 ;  51  L.  R.  A. 
238 ;    Norton  v.  U.  S.  Wood  Co.,  1903,  89  App.  Div.  237 ;  85  N.  Y. 
Supp.  886 ;   Winstead  v.  Reid,  1852,  Busb.  L.  (44  N.  C.)  76 ;   57  Am. 

277 


§  175]  MISRELIANCE   ON   BROKEN  CONTRACT  [Part  I 

few,  under  the  doctrine  of  Britton  v.  Turner,1  a  recovery  is 
allowed.2 

As  to  the  quasi  contractual  rights  of  a  contractor  whose 
breach  is  unintentional  or  unavoidable,  the  law  is  not  so  clear. 
In  some  jurisdictions  he  is  denied  relief.3  But  the  weight  of 
authority  appears  to  support  the  just  and  reasonable  rule  that 
one  who  in  good  faith  endeavors  to  perform,  and  whose  perform- 

Dec.  571 ;  Schmidt  v.  North  Yakima,  1895,  12  Wash.  121 ;  40  Pac. 
790;  Malbon  v.  Binney,  1860,  11  Wis.  107;  Manitowac  Steam,  etc., 
Works  v.  Manitowac  Glue  Works,  1903,  120  Wis.  1 ;  97  N.  W.  515. 
For  Vermont  doctrine,  see  Service  Contracts,  ante,  §  174  and  cases 
cited. 

1  1834,  6  N.  H.  481 :  26  Am.  Dec.  713. 

2  McKinney  v.  Springer,  1851,  3  Ind.  59 ;  54  Am.  Dec.  470 ;  McClay 
v.  Hedge,  1864,  18  la.  66 ;  Wolf  v.  Gerr,  1876,  43  la.  339,  (contract  to 
grade  railway) ;   Sheldon  v.  Leahy,  1896,  111  Mich.  29;   69  N.  W.  76; 
Lee  v.  Ashbrook,  1851,  14  Mo.  378;    55  Am.  Dec.  110;    Danforth  v. 
Freeman,  1898,  69  N.  H.  466;    43  Atl.  621;    Carroll  ».  Welch,  1861, 
26  .Tex.  147.     And  see  Mtna,  Iron  Works  v.  Kossuth  Co.,  1890,  79  la. 
40;   44  N.  W.  215;  McKnight  v.  Bertram  Heating,  etc.,  Co.,  1902,  65 
Kan.  859;    70  Pac.  345;    McMillan  v.  Malloy,   1880,   10  Neb.  228; 
4  N.  W.  1004 ;   35  Am.  Rep.  471,  (threshing  contract). 

3  Sinclair  v.  Bowles,   1829,  9  Barn.  &  Cr.  92,  (contract  to  repair 
chandeliers) ;  Munro  v.  Butt,  1858,  8  El.  &  Bl.  738 ;  Serber  v.  McLaugh- 
lin,  1901,  97  111.  App.  104 ;   Simpson  Cons.  Co.  v.  Stenberg,  1906,  124 
111.  App.  322 ;   Morford  v.  Mastin,  1828,  6  T.  B.  Mon.  (22  Ky.)  609 ; 
17  Am.   Dec.   168 ;  Presbyterian  Church  v.  Hoopes,  etc.,  Co.,   1887, 
66  Md.  598;  Riddell  v.  Peck-Williamson,  etc.,  Co.,  1902,  27  Mont,  44; 
69  Pac.  241 ;   Ferney.f.  Bardsley,  1901,  66  N.  J.  L.  239;   49  Atl.  443; 
Pullman  v.  Corning,  1853,  9  N.  Y.  93 ;   Smith  v.  Brady,  1858,  17  N.  Y. 
173 ;   72  Am.  Dec.  442.     In  Smith  v.  Grady,  supra,  the  court  said  (p. 
190) :   "To  conclude,  there  is,  in  a  just  view  of  the  question,  no  hard- 
ship in  requiring  builders,  like  all   other  men,  to  perform  their  con- 
tracts in  order  to  entitle  themselves  to  payment,  where  the  employer 
has  agreed  to  pay  only  on  that  condition.     It  is  true  that  such  con- 
tracts embrace  a  variety  of  particulars,  and  that  slight  omissions  and 
inadvertences  may  sometimes  very  innocently  occur.     These  should 
be  indulgently  regarded,  and  they  will  be  so  regarded  by  courts  and 
juries.     But  there  can  be  no  injustice  in  imputing  to  the  contractor  a 
knowledge  of  what  his  contract  requires,  nor  in  holding  him  to  a  sub- 
stantial performance.     If  he  has  stipulated  for  walls  of  a  given  ma- 
terial and  with  a  hard  inside  finish,  he  knows  what  he  is  to  do  and 
must  perform  it.  ...     If  he  fails  to  perform  when  the  requirement  is 
plain,  and  when  he  can  perform  if  he  will,  he  has  no  right  to  call  upon 
the  courts  to  make  a  new  contract  for  him ;   nor  ought  he  to  complain 
if  the  law  leaves  him  without  remedy.'! 

278 


Chap.  X]  BUILDING   AND   LIKE   CONTRACTS  [§  175 

ance,  though  seriously  incomplete  or  defective,  results  in  a 
benefit  to  the  defendant  which  he  elects  to  retain,  may  re- 
cover the  reasonable  value  of  his  labor  and  materials,  less 
the  damages  caused  by  his  breach.1  The  occupation  or  use 
of  a  building  is  undoubtedly  an  election  to  retain  the  benefit  of 
its  construction.2  The  same  is  ordinarily  true  of  the  use  of 
heating  or  other  apparatus  installed  in  a  building.  But  where 
the  occupation  of  one's  building  or  the  conduct  of  one's  busi- 
ness necessitates  the  use  of  defective  apparatus,  such  use,  if 
accompanied  by  a  request  that  the  apparatus  be  either  per- 


1  Dermott  v.  Jones,  1859,  23  How.  (U.  S.)  220 ;    Thomas  v.  Ellis, 
1842,  4  Ala.  108 ;    Davis  v.  Badders,  1892,  95  Ala.  348 ;    10  So.  422 ; 
Bertrand  v.  Byrd,  1844,  5  Ark.  651 ;    Katz  v.  Bedford,  1888,  77   Cal. 
319 ;    19  Pac.  523 ;    1  L.  R.  A.  826 ;    Bush  v.  Finucane,  1885,  8  Colo. 
192 ;   6  Pac.  514 ;   Pinches  v.  Swedish  Church,  1887,  55  Conn.  183 ;   10 
Atl.  264 ;  Everroad  v.  Schwartzkopf,  1890,  123  Ind.  35 ;  23  N.  E.  969 ; 
^Etna  Iron,  etc.,  Works  v.  Kossuth  Co.,  1890,  79  la.  40 ;  44  N.  W.  215 ; 
White  v.  Oliver,  1853,  36  Me.  92 ;    Howell  v.  Medler,  1879,  41  Mich. 
641 ;   2  N.  W.  911 ;  Eaton  v.  Gladwell,  1899,  121  Mich.  444;   80  N.  W. 
292 ;   Germain  v.  Union  School  Dist.,  1909,  158  Mich.  214 ;   122  N.  W. 
524 ;   Yeats  v.  Ballentine,  1874,  56  Mo.  530 ;    Decker  v.   School  Dist., 
1903,  101  Mo.  App.  115;  74  S.  W.  390;  McMillan  v.  Malloy,  1880,  10 
Neb.  228;    4  N.  W.  1004;   35  Am.  Rep.  471,  (threshing  contract); 
Danforth  v.  Freeman,  1898,  69  N.  H.  466 ;   43  Atl.  621 ;   Woodford  v. 
Kelly,  1904,  18  S.  D.  615 ;    101  N.  W.  1069,  (contract  to  cut  hay) ; 
Gove  v.  Island  City,  etc.,  Co.,  1890,  19  Or.  363 ;  24  Pac.  521 ;  Smith  v. 
Packard,  1897,  94  Va.  730 ;  27  S.  E.  586.  In  Pinches  v.  Swedish  Church, 
supra,  the  court  said  (p.  187) :   "The  hardship  of  this  rule  [that  there 
can  be  no  recovery  unless  the  contract  has  been  performed]  upon  the 
contractor  who  has  undesignedly  violated  his  contract,  and  the  in- 
equitable advantage  it  gives  to  the  party  who  receives  and  retains  the 
benefit  of  his  labor  and  materials,  has  led  to  its  qualification ;  and  the 
weight  of  authority  is  now  clearly  in  favor  of  allowing  compensation 
for  services  rendered  and  materials  furnished  under  a  special  contract, 
but  not  in  entire  conformity  with  it,  provided  that  the  deviation  from 
the  contract  was  not  willful,  and  the  other  party  has  availed  himself 
of  and  been  benefited  by  such  labor  and  materials." 

2  Davis  v.  Badders,  1892,  95  Ala.  348 ;    10  So.  422 ;   Bush  v.  Finu- 
cane, 1885,  8  Colo.  192 ;  6  Pac.  514 ;  Pinches  v.  Swedish  Church,  1887, 
55  Conn.  183 ;   10  Atl.  264 ;   Everroad  v.  Schwartzkopf,  1890,  123  Ind. 
35 ;   23  N.  E.  969 ;   White  v.  Oliver,  1853,  36  Me.  92 ;   Eaton  v.  Glad- 
well,  1899,  121  Mich.  444 ;   80  N.  W.  292 ;    Germain  v.  Union  School 
District,  1909,  158  Mich.  214 ;    122  N.  W.  524.     And  see  other  cases 
cited  in  note  1,  supra. 

279 


§  176]  MISRELIANCE   ON   BROKEN   CONTRACT  [Part  I 

fected  or  removed,  is  not  an  election  to  retain  the  benefit  of  its 
installation.1  So  the  use  of  a  sidewalk,  after  notice  that  it 
must  be  either  reconstructed  according  to  contract  or  taken 
up,  is  not  an  election.2 

In  Massachusetts  a  contractor  who  has  in  good  faith  at- 
tempted to  perform  and  who  in  fact  has  substantially  performed 
or  "  done  what  he  believed  to  be  a  compliance  with  the  con- 
tract "  3  is  not  allowed  to  sue  on  the  special  contract,4  but  may 
recover  on  quantum  meruitf 

§  176.  (3)  Contracts  for  the  sale  of  goods.  —  Contracts  for  the 
sale  of  goods  differ  from  building  and  service  contracts  in  that 
the  buyer,  upon  the  default  of  the  seller  after  delivery  of  part  of 
the  goods,  is  often  in  a  position  to  make  restitution  in  specie. 
It  is  because  of  this  fact,  perhaps,  that  although  in  New  York  and 
a  few  other  jurisdictions  relief  is  persistently  denied,6  the  weight 
of  authority  permits  a  recovery  by  the  seller  of  the  value  of 
the  goods  delivered  by  him.7  Even  in  England,  where  in  other 

1  Manitowoc  Steam  Boiler  Works,  v.  Manitowoc  Glue  Co.,  1903, 
120  Wis.  1 ;    97  N.  W.  515.     And  see  Fuller- Warren  Co.  ».  Shurts, 
1897,  95  Wis.  606;    70  N.  W.  683 ;    Madison  v.  American  Sanitary 
Engineering  Co.,  1903,  118  Wis.  480;   95  N.  W.  1097. 

2  Gwinnup  v.  Shies,  1903,  161  Ind.  500;    69  N.  E.  158.     And  see 
Simpson  Construction  Co.  v.  Stenberg,  1906,  124  111.  App.   322.     C/. 
Katz  v.  Bedford,  1888,  77  Cal.  319 ;    19  Pac.  523 ;    1  L.  R.  A.  826. 

3  Blood  v.  Wilson,  1886,  141  Mass.  25,  27 ;   6  N.  E.  362. 

4  Allen  v.  Burns,  1909,  201  Mass.  74 ;   87  N.  E.  194. 

6  Hayward  v.  Leonard,  1828,  7  Pick.   (Mass.)  181 ;    19  'Am.   Dec. 
268 ;  Walker  v.  Orange,  1860,  16  Gray  (Mass.)  195 ;  Powell  v.  Howard, 
1872,  109  Mass.  192 ;   Blood  v.  Wilson,  1886,  141  Mass.  25 ;   6  N.  E. 
362 ;  Sipley  v.  Stickney,  1906,  190  Mass.  43 ;  76  N.  E.  226 ;  5  L.  R.  A. 
(N.  S.)  469;    112  Am.  St.  Rep.  309;   Douglas  v.  City  of  Lowell,  1907. 
194  Mass.  268 ;    80  N.  E.  510 ;    Bowen  ».  Kimball,  1909,  203  Mass. 
364;   89  N.  E.  542;  133  Am.  St.  Rep.  302. 

8  Haslack  v.  Mayers,  1857,  26  N.  J.  L.  284 ;  Brown  v.  Fitch,  1867, 
33  N.  J.  L.  418;  Champlin  v.  Rowley,  1835,  13  Wend.  (N.  Y.) 
258;  1837,  18  Wend.  (N.  Y.)  187;  Mead  ».  Degolyer,  1837,  16  Wend. 
(N.  Y.)  632 ;  Baker  ».  Higgins,  1860,  21  N.  Y.  397 ;  Catlin  v.  Tobias, 
1863,  26  N.  Y.  217 ;  84  Am.  Dec.  183 ;  Kein  v.  Tupper,  1873,  52  N.  Y. 
550;  Nightingale  v.  Eiseman,  1890,  121  N.  Y.  288;  24  N.  E.  475; 
Witherow  v.  Witherow,  1847,  16  Ohio  238. 

7  McDonough  v.  Evans  Marble  Co.,  1902,  112  Fed.  634  ;  50  C.  C.  A. 
403 ;   United  States  v.  Molloy,  1906,  144  Fed.  321 ;   75  C.  C.  A.  283 ; 

280 


Chap.  X]         CONTRACTS   FOR   PAYMENT   OF   MONEY  [§  177 

cases  the  right  of  a  party  in  default  to  compensation  for  part 
performance  is  most  confidently  denied  (ante,  §  164),  the  seller 
of  goods  is  afforded  relief.1 

In  principle,  as  has  been  said  before,  the  right  of  the  party  in 
default  depends  upon  the  character  of  his  breach.  But,  while 
in  some  cases  stress  is  laid  on  the  injustice  of  allowing  a  recovery 
by  a  willful  wrongdoer,  and  in  others  upon  the  injustice  of  denying 
relief  to  one  who  has  endeavored  in  good  faith  to  perform,  the 
distinction  between  a  willful  and  an  unintentional  or  unavoidable 
breach  has  not  been  recognized  as  a  test  of  the  seller's  right. 

§  177.  (4)  Contracts  for  the  payment  of  money.  — Whether 
one  who  has  agreed  to  buy  land  or  goods,  or  who  has  con- 
tracted for  the  services  of  another,  and  has  defaulted  after  part 
payment  in  advance,  can  recover  the  amount  paid  by  him,  less 
the  value  of  what  he  has  received  and  damages  resulting  from 
his  default,  is  a  question  upon  which  there  is  the  usual  difference 


11  L.  R.  A.  (N.  S.)  487;  Gibboney  v.  R.  W.  Wayne  &  Co.,  1904,  141 
Ala.  300 ;  37  So.  436 ;  Richards  v.  Shaw,  1873,  67  111.  222 ;  Bowker  v. 
Hoyt,  1836,  18  Pick.  (Mass.)  555;  Heddon  v.  Roberts,  1883,  134  Mass. 
38;  45  Am.  Rep.  276;  Clark  v.  Moore,  1853,  3  Mich.  55;  Shaw  v. 
Badger,  1825,  12  Serg.  &  R.  (Pa.)  275;  Viles  v.  Barre,  etc.,  Power  Co., 
1906,  79  Vt.  311 ;  65  Atl.  104. 

1  Oxendale  v.  Wetherell,  1829,  9  Barn.  &  Cr.  386.  Action  to  recover 
the  price  of  130  bushels  of  wheat  sold  and  delivered.  The  defendant  gave 
evidence  to  show  that  there  was  a  contract  for  250  bushels,  and  insisted 
that  the  plaintiff  not  having  delivered  more  than  130  could  not  recover. 
Lord  TENTERDEN  (p.  387) :  "If  the  rule  contended  for  were  to  prevail, 
it  would  follow,  that  if  there  had  been  a  contract  for  250  bushels  of 
wheat,  and  249  had  been  delivered  to  and  retained  by  the  defendant, 
the  vendor  could  never  recover  for  the  249,  because  he  had  not  delivered 
the  whole."  PARKE,  J.  (p.  387) :  "Where  there  is  an  entire  contract 
to  deliver  a  large  quantity  of  goods,  consisting  of  distinct  parcels,  within 
a  specified  time,  and  the  seller  delivers  part,  he  cannot,  before  the  expi- 
ration of  that  time,  bring  an  action  to  recover  the  price  of  that  part  de- 
livered, because  the  purchaser  may,  if  the  vendor  fail  to  complete  his 
contract,  return  the  part  delivered.  But  if  he  retain  the  part  delivered 
after  the  seller  has  failed  in  performing  his  contract,  the  latter  may  re- 
cover the  value  of  the  goods  which  he  has  so  delivered."  Approved  in 
Colonial  Ins.  Co.  v.  Adelaide  Marine  Ins.  Co.,  1886,  12  A.  C.  128,  138. 
See  Williston,  "Sales,"  §  460.  Query,  as  to  whether  the  seller  would  be 
allowed  to  recover,  in  England,  if  it  appeared  that  the  buyer  had  con- 
sumed the  goods  before  the  seller  defaulted. 

281 


§  178]  MISRELIANCE   ON   BROKEN   CONTRACT  [Part  I 

of  opinion  and  the  common  failure  to  discriminate  between  a 
willful  and  an  unintentional  or  unavoidable  breach.  By  the 
weight  of  authority  relief  is  denied,1  but  there  are  decisions 
allowing  a  recovery.2 

§  178.  (Ill)  Measure  of  recovery.  —  An  examination  of  the 
cases  in  which  a  plaintiff  in  default  is  allowed  to  enforce  a 
quasi  contractual  obligation  shows  that  the  judicial  statement 
of  the  measure  of  damages  is  frequently,  if  not  generally, 
inaccurate.  In  many  cases  it  is  declared  that  the  plaintiff  is 
entitled  to  recover  the  contract  price,  less  the  damages  resulting 
to  the  defendant  from  the  plaintiff's  breach,3  or  less  the  cost  to 
the  defendant  of  completing  the  work  which  the  plaintiff  had 
undertaken.4  Such  a  statement  indicates  a  failure  to  dis- 

1  Wheeler  v.  Mather,  1870,  56  111.  241 ;  8  Am.  Rep.  683,  (land) ; 
Downey  ».  Riggs,  1897,  102  la.  88;   70  N.  W.  1091,  (land) ;  Hfflyard  v. 
Banchor,  1911,  85  Kan.  516;   118  Pac.  67,  (land) ;  Grimes  v.  Goud, 
1887,    (Me.)    10   Atl.    116    (land);    Ketchum    v.  Evertson,    1816,    13 
Johns.  (N.  Y.)  359 ;  7  Am.  Dec.  384,  (land) ;  Page  v.  McDonnell,  1873, 
55  N.  Y.  299,  (land) ;    Lawrence  v.  Miller,   1881,  86  N.  Y.  131  (land : 
plaintiff  unable  to  raise  money) ;   Wright  v.  Smith,  1897,  13  App.  Div. 
536 ;  43  N.  Y.  Supp.  728,  (contract  to  erect  a  building  bearing  plaintiff's 
name) ;   Beveridge  v.  West  Side  Const.  Co.,  1909,  130  App.  Div.  139 ; 
114  N.  Y.  Supp.  521,  (land) ;  Hathaway  v.  Hoge,  1885,  (Pa.)  1  Atl.  392, 
(land:   plaintiff  bankrupt);    Sanders  v.  Brock,  1911,  230  Pa.  St.  609; 
79  Atl.  772,    35  L.  R.  A.  (N.  S.)  711,  (land) ;  Estes  v.  Browning,  1853, 

11  Tex.  237 ;  60  Am.  Dec.  238. 

2  Cherry  Valley  Iron  Works  v.  Florence  Iron  Co.,  1894,  64  Fed.  569 ; 

12  C.  C.  A.  306 ;  22  U.  S.  App.  655,  (ore) ;   Michigan  Yacht  Co.  v. 
Busch,  1906,  143  Fed.  929 ;   75  C.  C.  A.  109,  (contract  for  purchase  of 
yacht  to  be  built  by  defendant) ;    Gilbreth  v.  Grewell,  1859,  13  Ind. 
484;  74  Am.  Dec.  266,  (land).     And  see  Davis  v.  Barada-Ghio  Real 
Estate  Co.,  1905,  115  Mo.  App.  327 ;  92  S.  W.  113,  118,  (land). 

3  Richards  v.  Shaw,  1873,  67  111.  222,   (sale  of  goods) ;  Byerlee  v. 
Mendel,  1874,  39  la.  382,  386,  (services) ;  Hayward  v.  Leonard,  1828, 
7  Pick.  (Mass.)  181 ;  19  Am.  Dec.  268,  (building  contract :  but  see  Gillis 
v.  Cobe,  1901,  177  Mass.  584 ;   59  N.  E.  455) ;  Bowker  v.  Hoyt,  1836, 
18  Pick.  (Mass.)  555,  (sale  of  goods) ;   McMillan  v.  Malloy,  1880,  10 
Neb.  228,  234;  4  N.  W.  1004;  35  Am.  Rep.  471,  (threshing  contract : 
but   see   Murphy  v.  Sampson,  1902,  2  Neb.  (Unof.)  297;   96  N.  W. 
494) ;  Hildebrand  v.  The  American  Fine  Art  Co.,  1901,  109  Wis.  171, 
179-182;    85  N.  W.  268;  53  L.  R.  A.  826,  (services).     See  Clark  v. 
Moore,  1853,  3  Mich.  55,  (sale  of  goods). 

*  McClay  v.  Hedge,  1864,  18  la.  66,  '(building  contract) ;  JEtna  Iron 
Works  v.  Kossuth  County,  1890,  79  la.  40,  46 ;  44  N.  W.  215,  (building 

282 


Chap.  X]          MEASURE  OF  RECOVERY  [§  178 

tinguish  the  case  under  consideration  from  that  of  substantial 
performance.  In  fact,  as  has  been  pointed  out  (ante,  §  175), 
the  two  are  essentially  different.  For  in  the  latter  the  obliga- 
tion is  contractual  and  the  action  is  to  recover  the  agreed  price, 
while  in  the  former  the  obligation  is  quasi  contractual  and  the 
action  is  to  recover  the  reasonable  value  of  the  benefit  con- 
ferred by  part  performance.  Of  such  reasonable  value  the 
price  agreed  upon  is  certainly  evidence;  but  the  two  are  not 
necessarily  identical. 

In  the  Massachusetts  case  of  Gillis  v.  Cobe,1  there  is  an  im- 
plication, at  least,  that  the  measure  of  recovery,  in  the  case  of  a 
building  which  has  been  constructed  in  good  faith  but  not  in 
accordance  with  the  requirements  of  the  contract,  is  "  the 
fair  market  value  of  the  building  as  it  now  exists."  The 
objection  to  this  is  that  the  market  value  of  the  building  may  be 
much  less  than  the  value  of  the  plaintiff's  labor  and  materials, 
not  because  of  the  plaintiff's  failure  to  fulfill  the  requirements  of 
the  contract,  but  because  of  the  poor  judgment  of  the  de- 
fendant in  planning  the  building,  or  for  other  causes.  As  was 
said  in  a  dissenting  opinion  by  Judge  KNOWLTON  : 2 

"  Whether  the  investment  in  the  building  turns  out  profitably 
or  improfitably  to  the  owner,  is  of  no  consequence.  ...  If, 
through  bad  management,  miscalculation  or  misfortune  for  which 
the  builder  is  not  responsible,  the  owner  is  unable  profitably 
to  use  the  building  for  the  purpose  for  which  it  was  intended, 
this  cannot  be  shown  to  diminish  the  sum  to  be  recovered.  A 
building  may  be  so  constructed  for  use  in  a  particular  kind  of 
business  that  it  would  be  worth  but  little  for  any  other  use,  and 
before  it  was  completed  the  business  may  become  unprofitable, 
and  the  building  be  of  little  value  on  that  account.  No  one  will 
contend  that  in  such  a  case  the  recovery  of  the  builder  is  to  be 
limited  by  the  value  of  the  building  to  the  owner." 

Another  frequent  statement  of  the  measure  of  recovery  is  that 
the  plaintiff  is  entitled  to  the  value  of  his  part  performance, 

contract) ;  Hillyard  v.  Crab  tree,  1854,  11  Tex.  264;  62  Am.  Dec.  475, 

(services). 

.    '  1901, 177  Mass.  584,  59  N.  E.  455.  «  At  page  602. 

283 


§  178]  MISRELIANCE   ON   BROKEN   CONTRACT  [Part  I 

not  exceeding  the  contract  price,  less  the  damages  suffered  by  the 
defendant.1  Whether  the  words  "  not  exceeding  the  contract 
price  "  are  intended  to  mean  that  the  plaintiff's  part  performance 
must  not  be  given  a  value  greater  than  the  price  agreed  upon  for 
full  performance,  or  that  in  computing  the  value  of  the  plaintiff's 
part  performance  the  rate  of  compensation  fixed  by  the  contract 
must  not  be  exceeded,  is  not  always  clear.  But  under  either 
interpretation  the  limit  established  by  this  statement  of  the 
rule  is  not  the  true  one.  The  underlying  notion  is  that  whatever 
may  be  the  actual  value  of  the  defaulting  plaintiff's  part  per- 
formance, the  defendant,  who  is  not  in  default,  should  under 
no  circumstances  be  charged  for  such  part  performance  at  a 
rate  higher  than  that  which  his  contract  indicates  that  he  was 
willing  to  pay.  It  is  not  the  aggregate  contract  price,  therefore, 
which  should  limit  the  plaintiff's  recovery,  but  such  a  proportion 
of  the  contract  price  as  the  value  of  the  part  performance 
bears  to  the  value  of  full  performance.2  And  while  this  is  or-' 

1  United  States  v.  Molloy,  1906,  144  Fed.  321 ;    75  C.  C.  A.  283 ; 
11  L.  R.  A.  (N.  S.)  487,  (sale  of  goods) ;  Davis  v.  Badders,  1892,  95  Ala. 
348 ;  10  So.  422,  423,  (building  contract) ;  Gibboney  v.  R.  W.  Wayne  & 
Co.,  1904,  141  Ala.  300 ;  37  So.  436,  (sale  of  goods) ;  Pinches  v.  Swedish 
Church,  1887,  55  Conn.  183 ;   10  Atl.  264,  (building  contract) ;  Duncan 
t>.  Baker,  1878,  21  Kan.  99,  106,  109,  (service) ;  McKnight  v.  Bertram 
Heating,  etc.,  Co.,  1902,  65  Kan.  859 ;    70  Pac.  345,  (heating  plant) ; 
White  v.  Oliver,  1853,  36  Me.  92,   (building  contract) ;  Lawrence  v. 
Gullifer,  1854,  38  Me.  532,  (service) ;  Allen  v.  McKibben,  1858,  5  Mich. 
449,  (cutting  and  hauling  timber) ;  Eaton  v.  Gladwell,  1899,  121  Mich. 
444,  449 ;  80  N.  W.  292,  (building  contract) ;  Yeats  v.  Ballentine,  1874, 
56  Mo.  530,  534,  (plumbing  contract) ;  Decker  v.  School  District,  1903, 
101  Mo.  App.  115;    74  S.  W.  390,  (building  contract);    Danforth  v. 
Freeman,  1898,  69  N.  H.  466 ;  43  Atl.  621,  (building  contract) ;  Gove  t>. 
Island  City,  etc.,  Co.,  1890,  19  Or.  363 ;  24  Pac.  521,  (building  contract) ; 
Bedow  v.  Tonkin,  1894,  5  S.  D.  432 ;  59  N.  W.  222, 224,  (service) ;  Mas- 
sey  v.  Taylor,  Wood  &  Co.,  1868,  5  Coldw.  (45  Tenn.)  447  ;  98  Am.  Dec. 
429,  (service);  Carroll  v.  Welch,    1861,26  Tex.    147,  (service:   court 
cites  Hillyard  v.  Crabtree,  supra,  as  standing  for  same  rule) ;   Viles  v. 
Barre,  etc.,  Power  Co.,  1906,  79  Vt.  311 ;  65  Atl.  104,  (sale  of  electric 
current).     See  Germain  v.  Union  School  District,  1909,  158  Mich.  214, 
218 ;   122  N.  W.  524 ;   123  N.  W.  798,  where  it  is  said  that  the  plain- 
tiff may  recover  the  value  of  the  building  as  defendant  took  possession 
of  it,  not  exceeding  the  contract  price,  less  the  cost  of  making  it  comply 
with  the  contract.     This  is  clearly  wrong. 

2  See  McKinney  v .  Springer,  1851, 3  Ind.  59, 65, 67-9 ;  54  Am.  Dec.  470. 

284 


Chap.  X]          MEASURE  OF  RECOVERY  [§  ITS 

dinarily  equivalent  to  the  statement  that  in  computing  the 
value  of  the  plaintiff's  performance  the  rate  established  by 
the  terms  of  the  contract  must  not  be  exceeded,  such  is  not 
the  case  where  the  contract  stipulates  a  flat  rate  for  services 
or  materials,  the  various  parts  or  units  of  which  differ  in 
value.  This  is  explained  and  illustrated  in  the  chapter  dealing 
with  the  quasi  contractual  rights  of  one  whose  default  is  ex- 
cused by  impossibility  (ante,  §  125). 

Accurately  stated,  then,  the  measure  of  recovery  is  the  reason- 
able value  of  the  plaintiff's  part  performance,  not  exceeding 
such  proportion  of  the  contract  price  for  full  performance 
as  the  value  of  the  part  performance  bears  to  the  value  of  full 
performance,  less  the  damages  resulting  to  the  defendant  from 
the  plaintiff's  breach. 


285 


CHAPTER  XI 

MISRELIANCE   ON   SUPPOSED  REQUIREMENT   OF  VALID   CONTRACT 

§  179.     In  general :   Mistake  as  to  terms  of  contract  or  fact  affecting 

obligation  to  perform. 
§  180.     The  right  to  recover  money  paid  in  performance  of  contract 

reformable  in  equity. 
§  181.     The  right  to  recover  money  paid  in  performance    of   parol 

contract  which  does  not  express  intention  of  parties. 
§  182.     The  right  to  recover  money  paid  by  drawee  of  negotiable  paper 

under  mistake  as  to  state  of  drawer's  account. 

§  179.  In  general :  Mistake  as  to  terms  of  contract  or  fact 
affecting  obligation  to  perform.  —  The  obligation  resulting  in 
various  cases  from  the  receipt  of  a  benefit  conferred  in  misre- 
liance  upon  a  contract  which  turns  out  to  be  invalid  or  unen- 
forceable has  been  considered  in  the  preceding  chapters.  Upon 
the  same  underlying  principle,  and  with  the  same  limitations, 
the  receipt  of  a  benefit  conferred  under  a  mistake  as  to  the 
terms  of  a  valid  and  enforceable  contract,1  or  as  to  the  existence 
of  a  fact  affecting  the  obligation  to  perform  a  contract,2  or  as 

1  Pearson  v.  Lord,  1809,  6  Mass.  81,  (payment  by  underwriter  in  ig- 
norance either  that  defendant  had  insured  more  than  his  own  interest 
in  ship  and  cargo,  or  that  insurance  was  restricted,  by  terms  of  policy, 
to  interest  of  defendant). 

2  Bize  v.  Dickason,  1786,  1  Term  R.  285,  (overpayment  by  creditor  of 
bankrupt  to  assignee  in  bankruptcy,  because  of  plaintiff's  ignorance 
that  he  could  set  off  claim  against  bankrupt) ;    Irving  v.  Richardson, 
1831,  2  Barn.  &  Ad.  193,  (overpayment  on  policy  of  marine  insurance 
in  ignorance  of  fact  that  there  was  other  insurance) ;    Kelly  v.  Solari, 
1841,  9Mees.  &  Wels.  54,  (payment  of  lapsed  insurance  policy) ;  Mills  v. 
The  Alderbury  Union,  1849,  3  Exch.  590,  (payment  by  surety  on  bond 
under  mistaken  belief  that  the  principal  had  defaulted) ;  Ray  &  Thorn- 
ton v.  Bank  of  Kentucky,  1843,  3  B.  Mon.  (42  Ky.)  510 ;  39  Am.  Dec. 
479,  (plaintiff  ignorant  that  he  was  exonerated  from  payment  of  bill 
because  of  defendant's  failure  to  present  to  acceptor  on  time) ;   Balti- 
more, etc.,  R.  Co.  v.  Faunce,  1847,  6  Gill  (Md.)  68;  46  Am.  Dec.  655, 
(plaintiff's  agent  in  settling  with  defendant  overlooked  a  credit  and  so 

286 


Chap.  XI]  IN  GENERAL  [§  179 

to  the  amount  of  money  or  property  called  for  by  a  contract,1 
raises  an  obligation  to  make  restitution. 

overpaid  him) ;  Pearson  v.  Lord,  1809,  6  Mass.  81,  (payment  by  under- 
writer in  ignorance  either  that  defendant  had  insured  more  than  his 
own  interest  in  ship  and  cargo,  or  that  insurance  was  restricted,  by  terms 
of  policy,  to  interest  of  defendant) ;  Garland  v.  Salem  Bank,  1812,  9 
Mass.  408 ;  6  Am.  Dec.  86 ;  Talbot  v.  Nat.  Bank  of  Commonwealth, 
1880,  128  Mass.  67 ;  37  Am.  Rep.  302,  (payment  of  note  by  indorser 
under  mistaken  belief  that  it  had  been  dishonored) ;  Merchants'  Ins. 
Co.  v.  Abbott,  1881,  131  Mass.  397,  (payment  of  insurance  in  ignorance 
of  facts  avoiding  policy) ;  Nollman  v.  Evenson,  1895,  5  N.  D.  344 ;  65 
N.  W.  686,  (payment  on  contract  for  plastering  under  mistaken  belief 
that  work  had  been  properly  done) ;  Phetteplace  v.  Bucklin,  1893,  18 
R.  I.  297 ;  27  Atl.  211,  (payment  of  lapsed  legacy  by  surety  of  executor) ; 
Guild  v.  Baldridge,  1852,  2  Swan  (32  Tenn.)  294,  (plaintiff  twice  paid 
price  of  logs  purchased  by  him) ;  Turner  Falls  Lumber  Co.  v.  Burns, 
1899,  71  Vt.  354 ;  45  Atl.  896,  (payment  for  timber  purchased  from  de- 
fendant under  mistake  as  to  boundary). 

1  Money :  Townsend  v.  Crowdy,  1860,  8  C.  B.  N.  S.  477,  (overpayment 
on  purchase  of  interest  in  partnership  under  mistake  as  to  amount  of 
profits) ;  Newall  v.  Tomlinson,  1871,  L.  R.  6  C.  P.  405,  (overpayment  for 
goods  purchased,  as  result  of  error  in  computing  weight) ;  First  Nat. 
Bank  of  Omaha  v.  Mastin  Bank,  1880,  2  McCrary  (U.  S.  C.  C.)  438; 
48  Fed.  433,  (overpayment  under  mistake  as  to  state  of  account  between 
two  banks);  Griffith  v.  Johnson's  Admr.  1837,  2  Harr.  (Del.)  177, 
(overpayment  on  bond) ;  Devine  v.  Edwards,  1881,  101  111.  138,  (over- 
payment for  milk  due  to  mistake  as  to  capacity  of  milk  cans) ;  Worley 
v.  Moore,  1884,  97  Ind.  15,  (overpayment  on  notes  due  to  miscalcula- 
tion of  interest) ;  Stotsenburg  v.  Fordice,  1895,  142  Ind.  490 ;  41  N.  E. 
313,  810,  (overpayment  of  debt ;  interest  computed  at  8  per  cent  in- 
stead of  6  per  cent) ;  Major  v.  Tardos,  1859,  14  La.  Ann.  10  (overpay- 
ment of  debt  by  reason  of  compounding  interest) ;  Goddard  v.  Putnam, 
1843,  22  Me.  363,  (overpayment  of  note  under  mistaken  impression  that 
it  bore  interest  from  date) ;  Baltimore,  etc.,  R.  Co.  v.  Faunce,  1847,  6 
Gill  (Md.)  68;  46  Am.  Dec.  655,  (plaintiff's  agent  in  settling  with  de- 
fendant overlooked  a  credit  and  so  overpaid  him) ;  Stuart  v.  Sears, 
1875,  119  Mass.  143  (overpayment  in  settlement  of  account  under 
mistake  as  to  previous  payments) ;  Trecy  v.  Jefts,  1889,  149  Mass.  211 ; 
21  N.  E.  360,  (overpayment  under  mistake  as  to  amount  of  debt) ; 
Lane  v.  Pere  Marquette  Boom  Co.,  1886,  62  Mich.  63;  28  N.  W. 
786,  (overpayment  for  driving  logs  as  a  result  of  mistake  in  woods  scale) ; 
City  of  Duluth  v.  McDonnell,  1895,  61  Minn.  288 ;  63  N.  W.  727,  (over- 
payment of  contractor  resulting  from  mistake  in  measurement  of  work 
done) ;  Billings  v.  McCoy  Brothers,  1876,  5  Neb.  187,  (overpayment  for 
cattle  due  to  mistake  in  weighing) ;  Wheadon  v.  Olds,  1838,  20  Wend. 
(N.  Y.)  174,  (overpayment  for  oats  purchased,  a  result  of  error  in  esti- 
mating quantity)  ;  George  v.  Tallman,  1871,  5  Lans.  (N.  Y.  Sup.  Ct.) 

287 


§  180]       MISRELIANCE   ON   REQUIREMENT   OF   CONTRACT     [Part  I 

The  fact  that  in  a  given  case  the  mistake  is  as  to  the  require- 
ment of  a  contract  with  a  third  person  instead  of  with  the 
defendant  is  immaterial,  if  it  is  a  mistake  affecting  the  duty, 
and  not  merely  the  policy,  of  doing  that  which  benefits  the 
defendant  (ante,  §  19).  This  was  not  appreciated,  apparently, 
in  the  Vermont  case  of  Johnson  v.  Boston  and  Maine  Railroad, 
Company,1  for  it  was  there  held  that  the  plaintiff,  who  made 
certain  transfers  of  mail  under  the  mistaken  belief,  shared  by 
the  defendant,  that  his  contract  with  the  government  required 
him  so  to  do,  whereas  in  fact  the  duty  of  making  the  transfers 
rested  upon  the  defendant,  could  recover  nothing  for  his  serv- 
ices. The  Supreme  Court  of  Michigan,  however,  in  a  similar 
case  permitted  a  recovery.2 

§  180.  The  right  to  recover  money  paid  in  performance  of 
contract  ref ormable  in  equity.  —  May  one  recover,  in  an  action 
at  law,  money  paid  in  excess  of  what  was  -justly  due  the 

392,  (overpayment  on  contract  to  buy  land  due  to  mistake  in  survey) ; 
Calkins  v.  Griswold,  1877,  11  Hun  (N.  Y.  Sup.  Ct.)  208,  (overpay- 
ment for  grapes  under  mistake  as  to  quantity) ;  Ransom  v.  Masten, 
1889,  52  Hun  (N.  Y.  Sup.  Ct.)  610 ;  4  N.  Y.  Supp.  781,  (overpay- 
ment due  to  fact  that  defendant  filled  contract  calling  for  "pounds" 
with  "packages"  weighing  }^  Ib.) ;  Payne  v.  Witherbee,  Sherman  & 
Co.,  1909,  132  App.  Div.  579;  117  N.  Y.  Supp.  15,  (overpayment 
due  to  mistake  in  computing  amount  due  under  contract  for  electric 
power) ;  Simms  v.  Vick,  1909,  151  N.  C.  78 ;  65  S.  E.  621 ;  24  L.  R. 
A.  (N.  S.)  517,  (overpayment  on  note  due  to  fact  that  payor  had  forgot- 
ten previous  payment) ;  Houston,  etc.,  R.  Co.  v.  Hughes,  1911,  Tex. 
Civ.  App.  ;  133  S.  W.  731,  (overpayment  of  contractor  for  construc- 
tion of  road  bed) ;  Noyes  v.  Parker,  1892,  64  Vt.  379;  24  Atl.  12,  (over- 
payment under  mistake  as  to  quantity  of  butter  delivered). 

Property:  Inman  v.  White  Lumber  Co.,  1910,  14  Cal.  App.  551 ;  112 
Pac.  560,  (ties  delivered  in  excess  of  number  required  by  contract) ; 
Johnson  v.  Saum,  1904,  123  la.  145 ;  98  N.  W.  599,  (mare  delivered  in 
payment  of  debt  in  ignorance  of  fact  that  part  of  debt  had  previously 
been  paid) ;  Caldwell  v.  Dawson,  1862,  4  Mete.  (61  Ky.)  121,  (delivery 
of  charcoal  in  excess  of  amount  called  for  by  contract) ;  Pittsburg 
Plate  Glass  Co.  v.  McDonald,  1903,  182  Mass.  593  ;  66  N.  E.  415,  (plain- 
tiff by  mistake  furnished  more  glass  than  was  called  for  by  contract : 
no  recovery,  chiefly  on  the  ground  that  the  defendant  received  no 
benefit). 

1 1897,  69  Vt.  521 ;  38  Atl.  267. 

*  McClary  v.  Michigan,  etc.,  R.  Co.,  1897,  102  Mich.  312 ;  60  N.  W. 
695. 

288 


Chap.  XI]        CONTRACT   REFORMABLE   IN   EQUITY  [§  180 

defendant,  where  it  appears  that  such  excess  was  called  for  by 
the  terms  of  a  written  contract  which  is  valid  and  enforceable 
at  law  but  which,  because  of  a  mistake  in  its  formation,  does  not 
express  the  actual  intention  of  the  parties?  If  the  mistake  is 
such  that  a  court  of  equity  would  not  reform  the  contract, 
it  is  clear  that  there  can  be  no  relief  at  law.  At  least,  it  would 
be  an  absurd  anomaly  to  compel  a  defendant  to  restore  that 
which  the  courts  of  both  law  and  equity  would  have  assisted 
him  to  obtain.  But  what  if  the  mistake  is  of  such  a  character 
that  the  plaintiff  is  entitled  to  a  reformation  of  the  contract, 
and  therefore  by  a  resort  to  equity  might  successfully  have 
resisted  the  collection  of  the  sum  sought  to  be  recovered  ? 

Relief  at  law  has  been  denied  in  such  cases  upon  the  ground 
that,  except  in  a  proceeding  in  equity  for  the  reformation  of  the 
contract,  parol  evidence  cannot  be  admitted  to  show  that 
the  parties  intended  to  make  a  contract  different  from  that  set 
out  in  the  instrument : 

Boyce  v.  Wilson,  1869,  32  Md.  122 :  Action  for  money  had 
and  received.  The  plaintiff  agreed  to  buy  from  the  defendant 
certain  real  estate  and  mining  stocks,  at  certain  valuations. 
According  to  the  testimony  of  the  plaintiff,  they  made  a  calcu- 
lation of  the  amount  the  plaintiff  was  to  pay  and  found  it  to  be 
$90,322.  The  agreement  was  then  reduced  to  writing,  but  the 
plaintiff  subsequently,  and  after  paying  the  consideration  set 
out  in  the  contract,  discovered  that  the  calculation  had  been, 
made  on  an  erroneous  basis  and  that  the  sum  which  ought  to 
have  been  expressed  was  $81,250.  MAULSBY,  J.  (p.  127) : 
"  Can  the  parol  evidence  vary  the  written  contract,  by  striking 
therefrom  the  consideration  expressed  in  it,  and  inserting  in 
its  stead  another  reduced  consideration  ?  The  plaintiff  has 
made  no  mistake  which  a  court  of  law  can  correct,  if  he  has  paid 
only  that  sum  which  his  contract  obliged  him  to  pay.  He  cannot 
recover  at  law  a  sum  paid  by  mistake,  unless  that  sum  were 
over  and  above  what  he  had  contracted  to  pay.  .  .  .  The 
written  contract  may  not  have  been  in  accordance  with  the 
intention  of  the  parties.  It  may  have  expressed,  by  mistake, 
one  consideration,  wher  the  real  intention  out  of  mind  at  the 
moment  of  its  execution,  was  that  it  should  have  expressed 

289 


§  180]       MISRELIANCE   ON   REQUIREMENT   OF   CONTRACT     [Part  I 

another.  But,  whatever  may  have  been  the  mistake,  or  how 
produced,  it  can  find  no  recognition  until  the  written  contract 
shall  have  been  reformed  and  made  to  conform  to  the  intention 
of  the  parties,  and  this  a  court  of  law  cannot  effect.  A  court  of 
equity  alone  can  reform  a  written  contract."  1 

1  For  the  same  reason  it  is  held  in  some  jurisdictions  that  where  an 
agreement  is  made  for  the  sale  of  land  and  a  mistake  as  to  the  price  is 
carried  into  the  recitals  of  the  deed  of  conveyance,  money  paid  as  a  re- 
sult of  such  mistake  cannot  be  recovered  in  an  action  at  law.  Carter  v. 
Beck,  1867,  40  Ala.  599 ;  Williams  v.  Hathaway,  1837,  19  Pick.  (Mass.) 
387 ;  (cf.  Cardinal  v.  Hadley,  1893,  158  Mass.  352 ;  33  N.  E.  575) ; 
Howes  v.  Barker,  1808,  3  Johns.  (N.  Y.)  506 ;  3  Am.  Dec.  526,  (but  see, 
contra,  Wilson  v.  Randall,  1876,  67  N.  Y.  338) ;  Farmers',  etc.,  Bank  t>. 
Galbraith,  1849,  10  Pa.  St.  490 ;  51  Am.  Dec.  498 ;  Kreiter  v.  Bomberger, 
1876,  82  Pa.  St.  59 ;  22  Am.  Rep.  750.  In  Howes  v.  Barker,  supra,  Chief 
Justice  KENT  said  (p.  510) :  "I  confess  that  I  have  struggled  hard,  and 
with  the  strongest  inclination,  to  see  if  the  action  for  money  had  and 
received  would  not  help  the  plaintiff  in  this  case ;  but  I  cannot  surmount 
the  impediment  of  the  deed,  which  the  plaintiff  has  accepted  from  the 
defendant,  and  which  contains  a  specific  consideration  in  money,  and 
the  quantity  of  acres  conveyed,  with  the  usual  covenant  of  seisin.  Sit- 
ting in  a  court  of  law,  I  think  I  am  bound  to  look  to  that  deed,  as  the 
highest  evidence  of  the  final  agreement  of  the  parties,  both  as  to  the 
quantity  of  the  land  to  be  conveyed,  and  the  price  to  be  given  for  it. 
If  there  be  a  mistake  in  the  deed,  the  plaintiff  must  resort  to  a  court  of 
equity,  which  has  had  a  long  established  jurisdiction  in  all  such  cases ; 
and  where  even  parol  evidence  is  held  to  be  admissible  to  correct  the 
mistake." 

In  other  jurisdictions  the  deed  is  not  regarded  as  concluding  the 
parties  as  to  the  consideration  agreed  to  be  paid :  Solinger  v.  Jewett, 
.  1865,  25  Ind.  479 ;  87  Am.  Dec.  372  ;  (quoted  with  approval  in  Wolcott 
v.  Frick,  1907,  40  Ind.  App.  236 :  81  N.  E.  731) ;  Goodspeed  v.  Fuller, 
1858,  46  Me.  141 ;  71  Am.  Dec.  572 ;  Cardinal  v.  Hadley,  1893, 158  Mass. 
352 ;  33  N.  E.  575  (cf.  Williams  v.  Hathaway,  1837,  19  Pick.  (Mass.) 
387) ;  White  v.  Miller,  1850,  22  Vt.  380 ;  Butt  v.  Smith,  1904,  12  Wis. 
566 ;  99  N.  W.  328 ;  105  Am.  St.  Rep.  1039,  (cf.  Ohlert  «.  Alderson, 
1893.  86  Wis.  433  ;  57  N.  W.  88).  In  White  v.  Miller,  supra,  the  court 
said  (p.  386) :  "The  purpose,  for  which  the  deed  is  made,  is  not  to 
state  the  contract  between  the  parties  in  regard  to  the  terms  of  the 
purchase,  but  to  pass  the  title  to  the  land.  The  deed  is  not,  strictly  speak- 
ing, an  agreement  between  the  grantor  and  the  grantee.  It  is  exe- 
cuted by  the  grantor  alone,  and  is  a  declaration  by  him,  addressed  to  all 
mankind,  informing  them^  that  he  thereby  conveys  to  the  grantee  the 
land  therein  described.  The  object  is  to  pass  the  title,  —  not  to  declare 
the  terms  upon  which  the  land  had  been  t  old  and  the  mode  in  which 
payment  was  to  be  made.  ...  It  is  not  intended  to  say,  that  the 
terms  of  a  contract  of  sale  may  not  be  recited  in  the  deed ;  and  when  the 

290 


Chap.  XI]  PAROL   CONTRACT  [§  181 

To  this  argument  Professor  Keener  replies  that  the  parol 
evidence  is  introduced  not  for  the  purpose  of  varying  the  terms 
of  the  contract  but  merely  for  the  purpose  of  showing  that  by 
reason  of  a  mistake  in  its  formation,  the  retention  by  the  de- 
fendant of  a  certain  sum  of  money,  paid  to  him  according  to 
its  terms,  is  inequitable.1  Conceding  the  soundness  of  this 
limitation  of  the  parol  evidence  rule,  the  objection  remains  that 
to  grant  relief  is  in  effect  to  reform  the  instrument  in  an  action  at 
law.  In  jurisdictions  where  equitable  defenses  are  allowed  at 
law,  this  objection  may  not  be  substantial ;  but  it  would  be 
manifestly  absurd  for  a  court  of  law  to  refuse  to  listen  to  evidence 
of  the  mistake  when  offered  as  a  defense  to  an  action  to  enforce 
the  contract,  and  forthwith,  in  an  action  for  money  had  and 
received  brought  by  the  defendant  in  the  former  action,  admit 
the  evidence  and  decree  restitution. 

§  181.  The  right  to  recover  money  paid  in  performance  of 
parol  contract  which  does  not  express  intention  of  parties.  —  The 
right  of  one  to  recover,  in  an  action  at  law,  money  paid  in  per- 
formance of  a  written  contract  which,  because  of  a  mutual 
mistake  in  its  formation,  does  not  express  the  intent  of  the  parties 
and  is  therefore  reformable  in  equity,  was  considered  in  the  last 
section.  If  the  contract  is  not  in  writing,  it  is  clearly  unneces- 
sary to  resort  to  equity ;  an  action  at  law  may  be  maintained 
to  recover  whatever  has  been  paid  in  excess  of  the  amount 
justly  due.2  As  was  said  in  Sheffield  v.  Hamlin : 3 

"In  a  case  of  mistake  in  a  written  contract,  the  necessity 
for  reforming  the  contract  before  seeking  to  enforce  it  according 
to  the  intent  of  the  parties  arises  from  the  rule  of  evidence, 
that  the  written  paper  is  to  be  treated  as  a  full  and  correct  ex- 
design  to  do  so  is  apparent,  effect  should  doubtless  be  given  to  the  re- 
rital.  But  when  the  language  of  the  deed,  as  in  the  present  case,  is- 
general,  and  the  words  used  may  have  their  full  force,  as  descriptive  of 
the  land,  we  think  they  should  not  be  construed  to  conclude  the  parties 
in  regard  to  the  terms  of  the  contract." 

1  Keener,  "Quasi-Contracts,"  pp.  123,  124. 

2  Norton  v.  Bohart,  1891,  105  Mo.  615;    16  S.  W.  598;   Sheffield  v. 
Hamlin,  1882,  26  Hun  (N.  Y.  Sup.  Ct.)  237. 

3 1882,  26  Hun  (N.  Y.  Sup.  Ct.)  237,  238. 

291 


§  182]      MISRELIANCE   ON   REQUIREMENT   OF   CONTRACT     [Part  I 

pression  of  the  intent,  and  it  cannot  be  varied  by  parol;  but 
when  the  contract  rests  in  parol  the  intent  of  the  parties  may  be 
shown  by  oral  proof,  and  when  the  intent  is  ascertained  it  is  to 
control." 

§  182.  The  right  to  recover  money  paid  by  drawee  of  negotiable 
paper  under  mistake  as  to  state  of  drawer's  account.  —  Money 
paid  by  the  drawee  of  a  negotiable  instrument  in  the  mis- 
taken belief  that  the  drawer's  account  shows  a  balance  sufficient 
to  meet  the  instrument  is  not  recoverable.1  Most  of  the  theories 
that  have  been  advanced  in  explanation  of  the  denial  of  relief 
to  the  drawee  who  pays  under  a  mistake  as  to  the  genuineness 
of  the  signature  of  the  drawer  (ante,  §  81  et  seq.)  have  also  been 
called  to  the  support  of  the  present  rule.  It  seems  probable 
that,  in  the  latter  case,  as  in  the  former,  the  rule  is  chiefly 
attributable  to  the  policy  of  maintaining  confidence  in  the  secur- 
ity of  negotiable  paper  (ante,  §  87). 

The  entry  of  the  amount  of  a  check  in  the  depositor's  pass 
book,  followed  by  the  entry  of  it  in  the  books  of  the  bank  to 
the  credit  of  the  depositor  and  the  debit  of  the  drawer,  is  re- 
garded as  the  equivalent  of  payment ; 2  but  the  mere  receipt  of 
the  check  by  the  bank  is  not.3  Whether  the  entry  of  the  check 

1  Chambers  v.  Miller,  1862,  13  C.  B.  N.  S.  125 ;  Pollard  v.  Bank  of 
England,  1871,  L.  R.  6  Q.  B.  623 ;  Riverside  Bank  v.  First  Nat.  Bank, 
1896,  74  Fed.  276 ;  20  C.  C.  A.  181 ;  38  U.  S.  App.  674 ;  First  Nat. 
Bank  of  Denver  v.  Devenish,  1890,  15  Colo.  229 ;  25  Pac.  177 ;  22  Am. 
St.  Rep.  394 ;  Manufacturers'  Nat.  Bank  v.  Swift,  1889,  70  Md.  515 ; 
17  Atl.  336 ;  14  Am.  St.  Rep.  381 ;  National  Bank  v.  Berrall,  1904,  70 
N.  J.  L.  757  ;  58  Atl.  189 ;  66  L.  R.  A.  599 ;  103  Am.  St.  Rep.  821,  (pay- 
ment stopped) ;  Oddie  v.  Nat.  City  Bank,  1871,  45  N.  Y.  735;  6  Am. 
Rep.  160  ;  (but  see  Nat.  Park  Bank  v.  Steele,  etc.,  Co.,  1890,  58  Hun 
81 ;  11  N.  Y.  Supp.  538) ;  Hull  v.  Bank  of  South  Carolina,  1838,  Dud- 
ley (S.  C.)  259 ;  Citizens'  Bank  v.  Schwarzsehild,  1909,  109  Va.  539 ; 
64  S.  E.  954 ;  23  L.  R.  A.  (N.  S.)  1092. 

In  Massachusetts  a  recovery  will  be  allowed  unless  the  payee  shows 
a  change  of  position.  Merchants'  Nat.  Bank  v.  Nat.  Eagle  Bank, 
1869,  101  Mass.  281 ;  100  Am.  Dec.  120 ;  Merchants'  Nat.  Bank  v. 
Nat.  Bank  of  Commonwealth,  1885,  139  Mass.  513 ;  2  N.  E.  89 ;  (but 
see  Boylston  Bank  v.  Richardson,  1869,  101  Mass.  287). 

1  City  Nat.  Bank  v.  Burns,  1880,  68  Ala.  267  ;  44  Am.  Rep.  138. 

3  Boyd  v.  Emmerson,  1834,  2  Ad.  &  Ell.  184. 

292 


Chap.  XI]  NEGOTIABLE   INSTRUMENTS  [§  182 

in  the  depositor's  pass  book  alone  is  enough  is  not  settled.1  In 
some  of  the  larger  cities  clearing  house  rules  prescribe  a  time 
limit  within  which  negotiable  paper  found  to  be  not  good  because 
of  lack  of  funds  may  be  returned.  As  between  banks  dealing 
under  such  a  rule,  the  return  of  paper  within  the  time  limit 
gives  to  the  drawee  the  right  to  recover.  In  some  cases  delay 
beyond  the  time  limit  is  held  to  be  fatal ; 2  in  others  the  rule  is 
more  liberally  construed,  and  unless  the  plaintiff  is  guilty  of 
laches  or  the  defendant's  position  is  altered,  a  recovery  is 
allowed.3 

1  That  it  is  not  equivalent  to  payment :  Nat.  Gold  Bank  v.  McDon- 
ald, 1875,  51  Cal.  64 ;  21  Am.  Rep.  697.     But  see  Oddie  v.  Nat.  City 
Bank,  1871,  45  N.  Y.  735 ;   6  Am.  Rep.  160  j  Levy  v.  Bank  of  U.  S., 
1802,  4  Dall.  (Pa.)  234. 

2  Preston  v.  Canadian  Bank,  1883,  23  Fed.  179,  (D.  C.  111.) 

3  Merchants'  Nat.  Bank  v.  Nat.  Eagle  Bank,  1869,  101  Mass.  281 ; 
100  Am.  Dec.  120 ;  Merchants'  Nat.  Bank  v.  Nat.  Bank  of  Common- 
wealth, 1885,  139  Mass.  513 ;  2  N.  E.  89. 


293 


CHAPTER  XII 

MISRELIANCE   ON   NON-CONTRACT   OBLIGATION 

§  183.     In  general. 

§  184.     Misreliance  on  duty  incident  to  status. 

§  185.    Misreliance  on  duty  as  executor  or  administrator. 

§  183.  In  general.  —  Perhaps  the  greater  number  of  primary 
legal  duties,  outside  the  field  of  contracts,  are  negative  rather 
than  positive,  i.e.  require  one  to  refrain  from  acting  rather 
than  to  act.  There  are  many  positive  non-contractual  obliga- 
tions, however,  and  one  who  confers  a  benefit  in  the  mistaken 
belief  that  he  is  performing  such  an  obligation,  is  ordinarily 
entitled  to  restitution.  It  has  accordingly  been  held  that 
a  coalmeter  of  London  who  mistakenly  paid  rent  to  the 
mayor  and  subsequently  paid  it  again  to  the  chamberlain, 
who  was  entitled  to  receive  it,  could  recover  the  money  paid 
to  the  mayor ; 1  that  one  who  paid  an  assessment  upon  another's 
property  for  a  street  improvement,  under  the  misapprehension 
that  the  assessment  was  upon  his  own  property,2  or  who  paid 
an  assessment  upon  his  own  property  under  the  misapprehension 
that  his  vendor  had  not  paid  it,3  could  recover  from  the  payee 

1  Bonnel  v.  Foulke,  1657,  2  Sid.  4.     The  mistake  in  this  case  appears 
to  have  been  a  mistake  of  law.     As  to  money  paid  under  mistake  of  law, 
see  ante,  §  35  et  seq. 

2  Mayer  v.  Mayor,  etc.,  of  New  York,  1875,  63  N.  Y.  455.     In  this 
case  ANDREWS,  J.,  said  (p.  458) :    "The  circumstances  bring  the  case 
within  the  general  rule,  which  authorizes  a  recovery  for  money  paid  by 
mistake.  .  .  .     The  city  received  the  money  upon  a  lawful  demand, 
but  from  a  person  who  was  not  legally  liable  to  pay  it,  and  we  do  not 
find  that  the  circumstance  that  money  paid  by  mistake  is  received  upon 
a  valid  claim  in  favor  of  the  recipient  against  a  third  person  prevents  a 
recovery  back,  provided  the  claim  against  the  party  who  ought  to  pay 
it  is  not  thereby  extinguished  or  its  collection  prevented." 

» Nevin  v.  ManMni,  1898,  20  Ky.  Law  Rep.  224 ;  45  S.  W.  669. 

294 


Chap.  XII]  DUTY   INCIDENT   TO   STATUS  [§  184 

the  amount  paid;  that  one  who  mistakenly  paid  a  tax  upon 
property  not  liable  to  assessment,1  or  an  amount  in  excess  of  the 
tax  levied  upon  his  property,2  was  entitled  to  restitution ;  that 
one  who  paid  a  sum  of  money  in  compromise  of  a  threatened 
action  to  collect  a  penalty  for  running  a  tollgate,  in  the  be- 
lief that  he  was  liable  to  pay  the  penalty,  whereas  in  fact 
no  such  penalty  was  provided  for  by  law,  could  recover  the 
money  paid.3 

§  184.  Misreliance  on  duty  incident  to  status.  —  Of  the  class 
of  cases  under  consideration  in  this  chapter  are  those  in  which 
a  recovery  is  sought  for  services  rendered  in  the  mistaken 
belief  that  the  status  of  the  plaintiff  imposed  upon  him  a  duty 
toward  the  defendant.  It  seems  clear,  upon  principle,  that 
one  who  believes  himself  to  be  a  slave  whereas  in  fact  he  has 
been  emancipated,  or  one  who  believes  himself  to  have  been 
legally  apprenticed  whereas  the  apprenticeship  is  void,  or  one 
who  believes  himself  or  herself  to  be  the  legal  husband  or  wife 
of  another  whereas  by  reason  of  the  previous  marriage  of  the 
latter  the  relation  of  husband  and  wife  does  not  exist,  should 
be  allowed  to  recover  the  value  of  any  services  rendered  or 
other  benefit  conferred  in  performance  of  the  duties  of  such 
supposed  status.  The  authorities  are  divided.4  In  many  of 

1  City  of  Indianapolis  v.  McAvoy,  1882,  86  Ind.  587 ;    City  of  In- 
dianapolis v.  Patterson,  1887,  112  Ind.  344 ;  14  N.  E.  551,  (cf.  De  Pauw 
Plate  Glass  Co.  v.  City  of  Alexandria,  1898,  152  Ind.  443 ;    52  N.  E. 
608) ;    George's  Creek  C.  &  I.  Co.  v.  County  Commrs.,  1882,  59  Md. 
255 ;   Betz  v.  City  of  New  York,  1907,  103  N.  Y.  Supp.  886,   (aff.  193 
N.  Y.  625). 

2  Wheeler  v.  Board  of  County  Commrs.,  1902,  87  Minn.  243;    91 
N.  W.  890. 

3  Pitcher  ».  Turin  Plank  Road  Co.,  1851,  10  Barb.  (N.  Y.  Sup.  Ct.) 
436.     Although  the  court,  in  this  case,  endeavors  to  show  that  the  mis- 
take was  one  of  fact  rather  than  of  law,  its  argument  is  not  convincing. 
As  to  money  paid  under  a  mistake  of  law,  see  ante,  §  35  et  seq. 

4  Slave:  recovery  allowed :  Kinney  v.  Cook,  1841,  4  111.  232;  Hickam  v. 
Hickam,  1891,  46  Mo.  App.  496;   Negro  Peter  v.  Steel,  1801,  3  Yeats 
(Pa.)  250;    Urie  v.  Johnston,  1831,  3  Penr.  &  W.  (Pa.)  212.     Contra: 
Negro  Franklin  v.  Waters,  1849,  8  Gill  (Md.)  322.     And  see  Boardman 
v.  Ward,  1889,  40  Minn.  399 ;  42  N.  W.  202 ;  12  Am.  St.  Rep.  749. 

Apprentice:  See  Burrows  v.  Ward,  1886,  15  R.  I.  346;  5  Atl.  500, 
which  indicates  that  recovery  would  be  denied. 

295 


§  185J       MISRELIANCE   ON   NON-CONTRACT   OBLIGATION      [Part  I 

the  cases,  the  plaintiff's  ignorance  of  his  true  status  was  the 
result  of  the  defendant's  fraudulent  representations,  and  the 
plaintiff  claimed  the  right  to  waive  the  tort  and  sue  in  assump- 
sit  —  a  question  separately  treated  in  another  chapter  (post, 
§§  282,  285,  286). 

In  measuring  the  recovery  in  a  case  of  mistake  as  to  status 
the  value  of  any  benefit  conferred  upon  the  plaintiff  by  the 
defendant  —  as  board,  lodging,  clothing,  or  instruction  —  must 
be  deducted  from  the  value  of  the  services  rendered  by  the 
plaintiff.  For  to  the  extent  that  the  benefit  has  been  paid  for, 
its  retention  is  not  unjust.  A  consideration  paid  to  the  father 
of  a  supposed  apprentice,  or  to  the  former  master  of  a  supposed 
slave,  must  be  deducted  for  the  same  reason.  And  if  such 
consideration  is  equivalent  to  the  value  of  the  services  rendered 
by  the  plaintiff,  no  recovery  should  be  allowed.1 

§  185.    Misreliance  on  duty  of  executor  or   administrator.  — 
Money  paid  by  an  executor  under  a  mistake  as  to  the  terms  of 
his  testator's  will,2  or  in  ignorance  of  the  fact  that  the  payee's 
legacy  had  lapsed,3  may  be  recovered. 

Although  the  rule  was  otherwise  at  the  English  common 
law,4  it  is  held  by  the  weight  of  American  authority  that  money 
paid  by  an  executor  or  administrator  to  a  creditor  in  excess  of 

Husband  or  Wife:  recovery  allowed:  Fox  v.  Dawson,  1820,  8  Mart. 
(La.)  94;  Higgins  v.  Breen,  1845,  9  Mo.  497.  Contra:  Payne's  Ap- 
peal, 1895,  65  Conn.  397 ;  32  Atl.  948 ;  33  L.  R.  A.  418 ;  48  Am.  St. 
Rep.  215;  Cooper  v.  Cooper,  1888,  147  Mass.  370;  17  N.  E.  892; 
9  Am.  St.  Rep.  721. 

If  the  plaintiff,  when  he  entered  into  the  marriage,  knew  that  the  only 
evidence  of  the  death  of  the  former  husband  of  the  defendant  was  his 
long-continued  absence  from  home,  he  assumed  the  risk  that  the 
marriage  was  void  and  cannot  be  said  to  have  performed  the  duties  of 
a  husband  in  reliance  upon  its  validity.  See  Ogden  v.  McHugh, 
1897,  167  Mass.  276 ;  45  N.  E.  731 ;  57  Am.  St.  Rep.  456. 

1  Urie  0.  Johnston,  1831,  3  Penr.  &  W.  (Pa.)  212. 

2  Northrop's  Extrs.  v.  Graves,  1849,  19  Conn.  548 ;  50  Am.  Dec.  264. 

3  Phetteplace  v.  Bucklin,   1893,    18  R.  I.  297;    27  Atl.  211.     Cf. 
Phillips  Extr.  v.  McConica,  1898,  59  Ohio  St.  1 ;  51  N.  E.  445 ;  69  Am. 
St.  Rep.  753,  where  the  mistake  was  one  of  law  and  relief  was  for  that 
reason  denied. 

4  See  Walker  v.  Hill,  1821, 17  Mass.  380,  383,  where  the  reason  for  the 
English  rule  is  explained. 

296 


Chap.  XII]      DUTY   OF   EXECUTOR   OR  ADMINISTRATOR         [§  185 

his  pro  rata  share,  under  the  mistaken  belief  that  the  estate 
is  solvent,  may  be  recovered.1 

An  overpayment  to  a  legatee  or  distributee  may  be  recovered, 
in  England,  only  when  made  under  the  compulsion  of  a  suit, 
or  when  the  executor  or  administrator  is  subsequently  obliged 
to  pay  debts  of  which  he  had  no  notice  when  the  payment 
sought  to  be  recovered  was  made.2  In  the  United  States, 
the  rule  is  not  so  strict,  and  while  in  some  jurisdictions  the 
executor  or  administrator  must  satisfy  the  court  that  he  acted 
prudently  in  making  the  payment,3  in  others,  and  more  prop- 

1  Mansfield  v.  Lynch,  1890,  59  Conn.  320 ;  22  Atl.  313 ;   12  L.  R.  A. 
285 ;  Wolf  v.  Beaird,  1888,  123  111.  585 ;   15  N.  E.  161 ;  5  Am.  St.  Rep. 
565 ;   East  v.  Ferguson,  1877,  59  Ind.  169 ;   Tarplee  ».  Capp,  1900,  25 
Ind.  App.  56;  56  N.  E.  270  \  Morris  v.  Porter,  1895,  87  Me.  510;  33 
Atl.  15;   Walker  ».  Hill,  1821,  17  Mass.  380;   Heard  v.  Drake,  1855,  4 
Gray  (Mass.)  514;    Rogers  v.  Weaver,  1832,  5  Ohio  536;    Thorson  v. 
Hooper,  1910,  57  Or.  75,  79;   109  Pac.  388.     Contra:  Lawson's  Admrs. 
v.  Hansborough,  1849,  10  B.  Mon.  (49  Ky.)  147 ;    (cf.  Story  v.  Story, 
1901, 22  Ky.  Law  Rep.  1869 ;  62  S.  W.  865) ;  Carson  v.  McFarland,  1828, 
2  Rawle  (Pa.)  118;    19  Am.  Dee.  627.     The  former  case  rests  partly 
upon  the  ground  that  the  plaintiffs  were  negligent,  and  partly  upon  the 
construction  of  a  Kentucky  statute ;   the  latter  chiefly  upon  the  theory 
that  the  defendant  had  received  only  what  was  honestly  due  him  and 
was  therefore  not  bound  in  conscience  to  make  restitution.     As  to  the 
plaintiff's  negligence,  it  is  elsewhere  shown  that  upon  principle  and  by 
the  weight  of  authority  the  negligence  of  the  plaintiff  is  not  a  defense. 
(See  ante,  §  15.)     To  the  claim  that  the  retention  of  the  benefit  is  not 
against  conscience  because  the  debt  was  honestly  due,  an  answer  is 
found  in  Mansfield  v.  Lynch,  supra,  where  the  court  said  (p.  328) :  "In 
one  sense  it  is  true  that  the  estate  owed  the  defendant  the  amount  over- 
paid, but  it  is  not,  in  any  legal  or  moral  sense  true  that  it  was  the  duty 
of  the  administrator  to  pay,  or  the  right  of  the  defendant  to  receive, 
her  claim  in  full  from  the  then  known  assets  of  the  estate.     Her  right 
was  only  to  receive  her  pro  rata  share  with  the  other  general  creditors, 
and  the  unpaid  balance  still  remained  a  claim  in  her  favor  against  the 
estate.     If  she  gets  more  than  this,  it  must  be  at  the  expense  of  the  other 
general  creditors  or  of  the  administrator.     She  did  in  fact  get  more  than 
she  was  entitled  to  solely  in  consequence  of  an  honest  mistake.  .  .  . 
Can  it  then  with  reason  be  said  she  has  'aright,  in  good  conscience,'  to 
retain  money  which  rightfully  belongs  to  the  estate,  to  which  she  is 
neither  morally  nor  legally  entitled,  and  which  she  obtained  solely  in  con- 
sequence of  an  honest  mistake  which  wrought  her  no  harm  whatever  ?" 

2  See  Williams,  "Executors,"  p.  1312  and  cases  there  cited. 

3  Clifton  v.  Clifton,  1907,  54  Fla.  5«5 ;  45  So.  458,  (allowing  relief  in 
equity) ;  Donnell  v.  Cooke,  1869,  63  N.  C.  227 ;  Lyle  v.  Siler,  1889,  103 

297 


§  185]       MISRELIANCE   ON   NON-CONTRACT   OBLIGATION       [Part  I 

erly  (see  ante,  §  15),  an  honest  mistake  as  to  the  condition  of 
the  estate  seems  to  be  regarded  as  a  sufficient  basis  for  relief.1 
Where  the  mistake  is  not  as  to  the  condition  of  the  estate,  but 
as  to  the  law,  relief  will  not  be  afforded,2  except  in  those  juris- 
dictions where  money  paid  under  a  mistake  of  law  may  be 

recovered.3 

/ 

N.  C.  261 ;  9  S.  E.  491,  492;  McEndree  v.  Morgan,  1888,  31  W.  Va. 
521 ;  8  S.  E.  285.  And  see  Harris  v.  White,  1819,  5  N.  J.  L.  422. 

Alexander  v.  Fisher,  1850,  18  Ala.  374;  Smith  v.  Smith,  1881,  76 
Ind.  236 ;  S,tokes  v.  Goodykoontz,  1890,  126  Ind.  535 ;  26  N.  E.  391 ; 
Buchanan  v.  Pue,  1847,  6  Gill  (Md.)  112;  Gallego's  Extrs.  v.  Attorney 
General,  1832,  3  Leigh  (Va.)  450,  488;  24  Am.  Dec.  650;  Lewis  v. 
Overby,  1879,  31  Grat.  (Va.)  601,  622;  (but  see  Davis  v.  Newman, 
1844,  2  Rob.  (Va.)  664;  40  Am.  Dec.  764) ;  McClung  v.  Sieg,  1902,  54 
W.  Va.  467 ;  46  S.  E.  210 ;  66  L.  R.  A.  884.  In  this  last  case  the 
plaintiff  had  remitted  the  assets  to  the  domiciliary  administrator  in 
Virginia,  who  in  turn  had  partially  distributed  the  estate.  Having 
been  forced  to  pay  a  judgment  subsequently  obtained  by  a  West  Virginia 
creditor,  the  plaintiff  was  allowed  in  equity  to  recover  from  a  Virginia 
distributee.  For  a  criticism  of  this  decision,  see  17  Harv.  Law  Rev.  422. 

2  Phillips  Extr.  v.  McConica,  1898,  59  Ohio  St.  1 ;  51  N.  E.  445 ;  69 
Am.  St.  Rep.  753 ;   Shriver  v.  Garrison,  1887,  30  W.  Va.  456 ;  4  S.  E. 
660. 

3  Northrop's  Extrs.  v.  Graves,  1849,  19  Conn.  548 ;  50  Am.  Dec.  264 ; 
Culbreath  v.  Culbreath,  1849,  7  Ga.  64 ;  50  Am.  Dec.  375. 


298 


CHAPTER  XIII 

MISRELIANCE   ON   OWNERSHIP  OF  PROPERTY 

§  186.  In  general. 

§  187.  (I)  Improvement  of  real  property. 

§  188.         Same  :  Upon  principle. 

§  189.         Same  :  Measure  of  recovery. 

§  190.  (II)  Improvement  of  personalty. 

§  186.  In  general.  —  Although  cases  of  mistake  as  to  the 
ownership  of  property,  real  or  personal,  are  neither  so  frequent 
nor  so  various  as  those  of  mistake  as  to  contractual  rights  or 
duties,  they  involve  the  same  general  principles  (ante,  §  10  et 
seq.).  Accordingly,  one  who  by  the  expenditure  of  money  or 
labor  upon  property  which  he  mistakenly  believes  to  be  his 
own,  confers  a  benefit  upon  the  real  owner  of  the  property, 
should  be  allowed  to  enforce  restitution.  It  will  be  seen, 
however,  that  as  a  result  of  supposed  considerations  of  policy 
affirmative  relief  at  law  is  generally  denied. 

§  187.  (I)  Improvement  of  real  property.  —  It  was  the  settled 
doctrine  of  the  common  law  that  an  occupant  of  land  makes 
improvements  thereon  at  his  peril.  The  reason  given  for  this 
harsh  doctrine  was  one  of  policy,  viz.  that  any  other  rule  would 
encourage  carelessness  in  the  examination  of  titles.  The  result 
was  that  an  occupant  who  made  improvements  in  the  honest 
but  mistaken  belief  that  he  was  the  owner  of  the  property 
could  neither  enforce  restitution  in  value  for  the  benefit  con- 
ferred upon  the  real  owner,  in  an  affirmative  action  against  such 
owner,  nor  require  such  restitution  as  a  condition  of  his  eject- 
ment.1 

1  Ford  v.  Holton,  1855,  5  Cal.  319,  (ejectment) ;  Wester-field  v.  Wil- 
liams, 1877,  59  Ind.  221,  (claim  filed  against  estate;  no  recovery  out- 
side statutory  provisions) ;  Webster  v.  Stewart,  1858,  6  Iowa  401,  (in- 
dependent action  for  value ;  no  recovery  outside  statutory  provisions) ; 

299 


§  187]  MISRELIANCE   ON  OWNERSHIP  OF  PROPERTY      [Part  I 

The  courts  of  equity,  applying  the  maxim  that  he  who  seeks 
equity  must  do  equity,  departed  from  the  common  law  rule  to 
the  extent  of  holding  that  where  the  real  owner  of  the  property 
seeks  the  assistance  of  equity  in  the  establishment  of  his  rights, 
he  will  be  compelled  to  make  restitution  for  improvements  made 
by  a  bona  fide  occupant.1  And  in  some  cases  it  has  been  held 
that  even  if  the  bona  fide  occupant  is  ejected  at  law,  he  is 
entitled  to  affirmative  relief  in  equity  for  the  benefit  conferred 
upon  the  owner  by  the  improvements.2 

Gregg  v.  Patterson,  1844,  9  Watts  &  Serg.  (Pa.)  197,  209,  (ejectment) ; 
Putnam  v.  Tyler,  1888,  117  Pa.  St.  570,588;  12  Atl.  43,  (ejectment). 
And  see  McDonald  v.  Rankin,  1909,  92  Ark.  173 ;  122  S.  W.  88,  91 ; 
Parsons  v.  Moses,  1864,  16  Iowa  440. 

1  Bright  v.  Boyd,  1841,  1  Story  (U.  S.  C.  C.)  478,  494;   Fed.  Cas., 
No.  1875 ;   Gordon,  Rankin  &  Co.  v.  Tweedy,  1883,  74  Ala.  232 ;   49 
Am.  Rep.  813 ;  Ebelmesser  v.  Ebelmesser,  1881,  99  111.  541 ;  Wakefleld  v. 
Van  Tassell,  1905,  218  111.  572 ;   75  N.  E.  1058 ;   Pugh  v.  Bell,  1825,  2 
T.  B.  Mon.  (18  Ky.)  125 ;    15  Am.  Dec.  142 ;   Jones  v.  Jones,  1846,  4 
Gill  (Md.)  87,  102 ;    McLaughlin  v.  Barnum,  1869,  31  Md.  425,  453 ; 
Bacon  v.  Cottrell,  1868,  13  Minn.  194 ;   Smith  v.  Drake,  1873,  23  N.  J. 
Eq.  302  ;  Putnam  v.  Ritchie,  1837,  6  Paige  (N.  Y.  Ch.)  390 ;  Thomas  v. 
Evans,  1887,  105  N.  Y.  601 ;   12  N.  E.  571 ;  59  Am.  Rep.  519,  (action 
to  vacate  and  annul  a  deed) ;   Bomberger  v.  Turner,  1862,  13  Ohio  St. 
263 ;   82  Am.  Dec.  438,  (bill  to  set  aside  a  sale  of  land  as  fraudulent 
against  creditors) ;  Skiles's  Appeal,  1885,  110  Pa.  St.  248;  20  Atl.  722, 
(bill  to  set  aside  gratuitous  conveyance  by  an  insolvent  decedent) ;  Van 
Zandt  v.  Brantley,  1897,  16  Tex.  Civ.  App.  420 ;  42  S.  W.  617,  (action 
to  rescind  a  sale) ;    Southall  v.  M'Keand,  1794,  1  Wash.  (Va.)   336, 
339;    Williamson  v.  Jones,  1897,  43  W.  Va.  562;   27  S.  E.  411;  38 
L.  R.  A.  694 ;  64  Am.   St.  Rep.   891.     See  Dellet  v.  Whitner,  1839, 
Cheves  Eq.  (S.  C.)  213,  228. 

2  Bright  v.  Boyd,  1841,  1  Story  (U.  S.  C.  C.)  478;  Fed.  Cas.,  No.  1, 
875  (cf.  2  Story's  "  Equity  Jurisprudence,"  §  1238) ;   Parker  v.  Stevens, 
1820,  3  A.  K.  Marsh.  (10  Ky.)  197,  202 ;  Thomas  v.  Thomas'  Extr.  1855, 
16  B.  Mon.  (55  Ky.)  420 ;    Quynn  v.  Staines,  1793,  3  Hair.  &  McH. 
(Md.)  128,  (injunction  to  require  purchaser  to  withhold  purchase  money 
sufficient  to  pay  for  improvements) ;    Union  Hall  Ass'n  v.  Morrison, 
1873,  39  Md.  281 ;  Hatcher  v.  Briggs,  1876,  6  Or.  31,  (cross  bill  in  an  ac- 
tion of  ejectment).     And  see   Valle's  Heirs  v.  Fleming's  Heirs,  1859, 
29  Mo.  152 ;  77  Am.  Dec.  557,  (rule  applied  to  an  occupant  whose  pur- 
chase money  has  been  applied  in  the  extinguishment  of  a  valid  mort- 
gage) ;  Wilie  v.  Brooks,  1871,  3  Morris  (45  Miss.)  542,  549,  (occupants 
had  brought  owners  into  court  on  a  bill  to  restrain  an  action  at  law  on 
ground  of  estoppel). 

Contra:  Armstrong  v.  Ashley,  1907,  204  U.  S.  272,  285;   27  S.  Ct. 

300 


Chap.  XIII]      IMPROVEMENT   OF   REAL   PROPERTY  [§  187 

The  courts  of  law,  influenced  probably  by  the  attitude  of 
equity,  have  slightly  modified  the  old  common  law  rule,  and 
hold  that  where  the  real  owner  brings  an  action  for  mesne 
profits,  the  bona  fide  occupant  may  set  off  or  recoup  the  value 
of  his  improvements  to  the  extent  of  the  rents  and  profits 
demanded.1  They  still  refuse,  however,  to  give  the  occupant 
affirmative  relief  or  even  to  make  restitution  a  condition  of 
ejectment.2 

That  the  severe  doctrine  of  the  common  law  does  not  com- 
mend itself  is  evidenced  by  the  fact  that  in  most  States  statutes 
have  been  enacted  securing  to  the  bona  fide  occupant  the  value 
of  improvements  made  by  him  and  the  amount  of  taxes  paid 
by  him,  over  and  above  the  amount  due  for  use  andoccupa- 

270 ;  Ellett  v .  Wade,  1872,  47  Ala.  456,  466 ;  Anderson  v.  Reid,  1899, 
14  App.  D.  C.  54;  Williams  v.  Vanderbilt,  1893,  145  111.  238;  34  N.  E. 
476 ;  21  L.  R.  A.  489 ;  36  Am.  St.  Rep.  486 ;  Putnam  v.  Ritchie,  1837, 
6  Paige  (N.  Y.  Ch.)  390;  Winthrop's  Admrs.  v.  Huntington,  1828,  3 
Ohio  327 ;  17  Am.  Dec.  601 ;  Fricke  v.  Safe  Deposit,  etc.,  Co.,  1897, 
183  Pa.  St.  271 ;  38  Atl.  601.  And  see  Graeme  v.  Cullen,  1873,  23  Gratt. 
(Va.)  266,  296. 

1  Hylton  v.  Brown,  1808,  2  Wash.  (U.  S.  C.  C.)  165 ;  Fed.  Gas.,  No. 
6983;    Kerr  v.  Nicholas,  1889,  88  Ala.  346;    6  So.    698;    Jackson   v. 
Loomis,  1825,  4  Cow.  (N.  Y.)  168;    15  Am.  Dec.  347;    Ege  v.  Kille, 
1877,  84  Pa.  St.  333,  340.     And  see  Searl  v.  School  Dist.,  1890,  133  U.  S. 
553  ;   10  S.  Ct.  374 ;  Huse  v.  Den,  1890,  85  Cal.  390,  401 ;  24  Pac.  790  ; 
20  Am.  St.  Rep.  232;   Doe  d.  Scott  v.  Alexander,  1861,  2  Houst.  (Del.) 
321,  (but  occupant  cannot  recover  for  improvements  made  by  his  land- 
lord) ;    Wakefield  v.  Van  Tassell,  1905,  218  111.  572 ;    75  N.  E.  1058 ; 
Parsons  v.  Moses,  1864,  16  la.  440,  445 ;   Tongue  v.  Nutwell,  1869,  31 
Md.  302,  309 ;  Carter  v.  Brown,  1892,  35  Neb.  670,  675 ;  53  N.  W.  580 ; 
Patterson  v.  Reardon,  1850,  7  U.  C.  Q.  B.  326 ;   Effinger  v.  Hall,  1885, 
81  Va.  94,  101. 

In  Jackson  v.  Loomis,  supra,  the  court  said  (p.  172):  "There  is 
certainly  no  reason,  in  general,  why  the  owner  of  land  should  be  com- 
pelled to  pay  for  improvements  which  he  neither  directed  nor  desired, 
as  a  condition  on  which  he  is  to  gain  possession  of  his  property.  But 
when  an  occupant  has  taken  possession  under  a  bona  fide  purchase,  and 
made  permanent  improvements,  it  is  very  hard  for  him  to  lose  both  land 
and  improvements.  If  the  plaintiff  is  not  content  with  acquiring 
possession  of  his  property  in  an  improved  condition,  after  he  has  neg- 
lected to  assert  his  title  for  a  number  of  years,  it  is  certainly  equitable 
that  the  defendant  should  be  allowed  the  value  of  his  improvements, 
made  in  good  faith,  to  the  extent  of  the  rents  and  profits  claimed." 

2  See  cases  cited  note  1,  page  299. 

301 


§  187]  MISRELIANCE  ON  OWNERSHIP  OF   PROPERTY      [Part  I 

tion.1     The  policy  which  led  to  these  enactments  is  clearly 
stated  in  a  case  arising  under  the  Connecticut  statute : 

Gnswold  v.  Bragg,  1880,  48  Fed.  519 ;  18  Blatch.  (U.  S.  C.  C.) 
202;  SHIPMAN,  J.  (p.  520) :  "The  statute  practically  impresses 
upon  the  land  of  a  successful  plaintiff  in  ejectment  a  lien  for 
the  excess,  above  the  amount  due  for  use  and  occupation,  of  the 
present  value  of  the  improvements  which  have  been  placed  on 
the  land,  before  the  commencement  of  the  action,  by  a  defendant 
or  his  ancestors  or  grantors,  in  good  faith,  and  in  the  belief  that 
he  or  they  had  an  absolute  title  to  the  land  in  question,  and 
forbids  occupancy  by  the  plaintiff  until  the  lien  is  paid.  There 
is  a  natural  equity  which  rebels  at  the  idea  that  a  bona  fide 
occupant  and  reputed  owner  of  land  in  a  newly  settled  country, 
where  unimproved  land  is  of  small  value,  or  where  skill  in  con- 
veyancing has  not  been  attained,  or  where  surveys  have  been 
uncertain  or  inaccurate,  should  lose  the  benefit  of  the  labor 
and  money  which  he  had  expended  in  the  erroneous  belief  that 
his  title  was  absolute  and  perfect.  While  it  is  true  that  im- 
provements and  permanent  buildings  upon  land  belong  to  the 
owner,  yet,  in  a  comparatively  newly  organized  state,  where 
titles  are  necessarily  more  uncertain  than  they  are  in  England, 
there  is  an  instinctive  conviction  that  justice  requires  that  the 
possessor  under  a  defective  title  should  have  recompense  for 
the  improvements  which  have  been  made  in  good  faith  upon 
the  land  of  another.  The  maxim,  often  repeated  in  the  decisions 
upon  this  subject,  nemo  debet  locupletari  ex  alterius  incommodo, 
tersely  expresses  the  antagonism  against  the  enrichment  of  one 
out  of  the  honest  mistake,  and  to  the  ruin,  of  another.  It  is 
obvious  that  this  statutory  equity  is  not  without  occasional 

1  See  the  following  cases  in  which  statutes  are  referred  to  :  Southern 
Cotton  Oil  Co.  v.  Henshaw,  1890,  89  Ala.  448 ;  7  So.  760 ;  McDonald  v. 
Rankin,  1909,  92  Ark.  173 ;  122  S.  W.  88 ;  O'Brien  ».  Flint,  1902,  74 
Conn.  502 ;  51  Atl.  547 ;  Hicks  v.  Webb,  1906,  127  Ga.  170 ;  56  S.  E. 
307  ;  Wakefield  v.  Van  Tassell,  1905,  218  111.  572 ;  75  N.  E.  1058 ;  Par- 
sons v.  Moses,  1864,  16  la.  440 ;  Pass  v.  McLendon,  1885,  62  Miss.  580 ; 
Bellows  v.  McCartee,  1846,  20  N.  H.  515 ;  Neeld  v.  Cunningham,  1907, 
216  Pa.  St.  523,  527 ;  65  Atl.  1095 ;  Salinas  v.  Aultman  &  Co.,  1895,  45 
S.  C.  283 ;  22  S.  E.  889 ;  Parker  v.  Vinson,  1899, 11  S.  D.  381 ;  77  N.  W. 
1023 ;  Rutland  R.  Co.  v.  Chaffee,  1900,  72  Vt.  404 ;  48  Ati.  700 ;  John- 
son v.  Ingram,  1911,  63  Wash.  554 ;  115  Pac.  1073 ;  Zwietusch  v.  Wat- 
kins,  1884,  61  Wis.  615 ;  21  N.  W.  821. 

302 


Chap.  XIII]      IMPROVEMENT   OF   REAL   PROPERTY  [§  188 

hardships.  The  true  owner  may  be  forced  to  sell  his  land 
against  his  will,  and  may  sometimes  be  placed  too  much  in 
the  power  of  capital,  but  a  carefully  regulated  and  guarded 
statute  should  ordinarily  be  the  means  of  doing  exact  justice 
to  the  owner." 

Their  constitutionality  has  been  often  challenged,  but  in 
general  has  been  upheld. 1 

§  188.  Same  :  Upon  principle.  —  Whether  or  not  a  recovery 
should  be  allowed  in  these  cases  is  a  question  of  some  difficulty. 
The  fear  of  the  common  law  courts  that  to  permit  a  recovery 
would  be  to  place  a  premium  upon  heedlessness  is  probably 
groundless.  Certainly,  the  doctrine  of  equity  has  not  brought 
disaster.  But  a  more  serious  objection  to  recovery  (and  one 
that  has  not  been  given  the  attention  it  deserves)  is  the  hard- 
ship that  must  sometimes  result  to  the  owner  if  he  is  com- 
pelled to  pay  for  improvements  which,  though  they  may  en- 
hance the  value  of  his  property,  he  does  not  want.  The  owner 
should  certainly  have  an  election  either  to  pay  for  the  im- 
provements or  to  sell  the  land  to  the  improver  at  its  fair 
market  value.2  And  with  this  election,  the  hardship  to  the 
owner  would  probably  be  less,  in  practically  every  case,  than 
that  which  would  result  to  the  innocent  occupant  if  he  were 
denied  relief. 

1  Griswold  v.  Bragg,  1880,  48  Fed.  519,  522 ;  18  Blatch.  (U.  S.  C.  C.) 
202;    Fee  v.  Cowdry,    1885,  45  Ark.    410,   413;    55  Am.    Rep.  560; 
Ross  v.  Irving,  1852,  14  111.  171 ;  Armstrong  v.  Jackson  d.  Elliott,  1825, 
1  Blaekf.  (Ind.)  374;    Childs  v.  Shower,  1865,  18  la.  261,  (holding  an 
amendatory  act  giving  defendant  personal  judgment  unconstitutional) ; 
Claypoole  v.  King,  1879,  21  Kan.  602 ;   Madland  ».  Beuland,  1878,  24 
Minn.  372 ;  McCoy  v.  Grandy,  1854,  3  Ohio  St.  463,  (holding,  however, 
that  a  provision  giving  defendant  option  to  pay  value  of  land  and  take 
title  is  unconstitutional).     And  see   Society,  etc.,  v.  Wheeler,  1814,  2 
Gall.  (U.  S.  C.  C.)  105,  137;  Fed.  Gas.,  No.  13,156;  Billings  v.  Hall, 
1857,  7  Cal.  1,  (upholding  constitutionality  of  acts  in  general  but  holding 
particular  act,  which  failed  to  distinguish  between  a  bona  fide  occupant 
and  a  tortious  one,  unconstitutional) ;  Newton  v.  Thornton,  1885,  3  N. 
Mex.  189 ;   5  Pac.  257,  (holding  act  cannot  affect  landowner's  right  to 
improvements  made  before  passage  of  act).     See  also   Cooley,  "Con- 
stitutional Limitations  "  (7th  ed.),  pp.  550-553  and  cases  cited. 

2  See  decree  in  Union  Hall  Ass'n  v.  Morrison,  1873,  39  Md.  281,  298. 

303 


§  189]  MISRELIANCE   ON  OWNERSHIP  OF  PROPERTY      [Part  I 

§  189.  Same :  Measure  of  recovery.  —  Since  in  these  cases 
the  improvement  is  not  made  at  the  instance  of  the  owner  of 
the  land,  it  cannot  fairly  be  adjudged  that  he  is  benefited  by 
the  services  rendered,  money  expended,  and  materials  furnished, 
unless  the  market  value  of  his  property  is  enhanced  (see  ante, 
§§  8,  107).  The  limit  of  recovery,  therefore,  whether  at  law 
or  in  equity,  should  be  the  extent  of  the  enhancement  of  the 
value  of  the  property  —  not  the  value  of  the  occupant's  services 
nor  the  cost  of  the  improvement.1  This  is  recognized  in  the 
Betterment  Acts  to  which  reference  has  been  made  (ante,  §  187). 

§  190.  (II)  Improvement  of  personalty.  —  With  the  same 
policy  of  discouraging  heedlessness  that  led  to  the  denial  of 
relief  in  cases  of  the  improvement  of  land,  the  common  law  has 
refused  to  permit  one  who,  in  the  mistaken  belief  that  he  was 
the  owner,  has  enhanced  the  value  of  another's  personal  property 
by  labor  expended  in  its  improvement  or  transportation,  to 
recover  the  value  of  the  benefit  resulting  to  the  real  owner : 

Isle  Royale  Mining  Co.  v.  Hertin,  1877,  37  Mich.  332 ;  26 
Am.  Rep.  520 :  Assumpsit  for  value  of  labor  and  expenses  in 
cutting,  splitting,  piling,  and  hauling  wood.  The  parties  were 
owners  of  adjoining  tracts  of  timbered  land,  and  the  plaintiffs, 
in  consequence  of  a  mistake  respecting  the  actual  location, 
went  upon  the  mining  company's  lands  and  cut  a  quantity  of 
wood,  which  they  hauled  and  piled  on  the  bank  of  Portage 
Lake.  Subsequently,  the  defendant  took  possession  of  the  wood 
and  sold  it.  COOLEY,  C.J.  (p.  337):  "Nothing  could  more 

i  Greer  v.  Vaughan,  1910,  96  Ark.  524 ;  132  S.  W.  456,  459,  (c/. 
Reynolds  v.  Reynolds,  1892,  55  Ark.  369,  374 ;  18  S.  W.  377) ;  Adams  v. 
Kells,  1909,  79  Kan.  564;  100  Pac.  506;  Proctor  v.  Smith,  1871,  8 
Bush  (71  Ky.)  81,  (c/.  Patrick  v.  Woods,  1813,  3  Bibb  (6  Ky.)  29; 
Hall  v.  Brummal,  1869,  7  Bush  (70  Ky.)  43,  where  under  exceptional 
circumstances  the  occupant  was  allowed  cost  of  improvements) ;  Ebel- 
messer  v.  Ebelmesser,  1881,  99  111.  541,  549;  Union  Hall  Ass'n  v. 
Morrison,  1873,  39  Md.  281 ;  Petit  v.  Flint,  etc.,  R.  Co.,  1899,  119  Mich. 
492 ;  78  N.  W.  554 ;  75  Am.  St.  Rep.  417 ;  Hicks  v.  Blakeman,  1896, 
74  Miss.  459 ;  21  So.  7,  400 ;  Sires  v.  Clark,  1908,  132  Mo.  App.  537 ; 
112  S.  W.  526;  Lothrop  v.  Michaelson,  1895,  44  Neb.  633,  639;  63 
N.  W.  28;  Wendell  v.  Moulton,  1852,  26  N.  H.  41,  66;  Fain  v.  Nelms, 
1908,  113  S.  W.  1002,  (Tex.  Civ.  App.);  Bacon  v.  Thornton,  1897, 
16  Utah  138 ;  51  Pac.  153. 

304 


Chap.  XIII]          IMPROVEMENT   OF   PERSONALTY  [§  190 

encourage  carelessness  than  the  acceptance  of  the  principle  that 
one  who  by  mistake  performs  labor  upon  the  property  of  another 
should  lose  nothing  by  his  error,  but  should  have  a  claim  upon 
the  owner  for  remuneration.  Why  should  one  be  vigilant  and 
careful  of  the  rights  of  others  if  such  were  the  law  ?  Whether 
mistaken  or  not  is  a-11  the  same  to  him,  for  in  either  case  he  has 
employment  and  receives  his  remuneration;  while  the  in- 
conveniences, if  any,  are  left  to  rest  with  the  innocent  owner. 
Such  a  doctrine  offers  a  premium  to  heedlessness  and  blunders, 
and  a  temptation  by  false  evidence  to  give  an  intentional  tres- 
pass the  appearance  of  an  innocent  mistake. 

"A  case  could  seldom  arise  in  which  the  claim  to  compen- 
sation could  be  more  favorably  presented  by  the  facts  than  it 
is  in  this ;  since  it  is  highly  probable  that  the  defendant  would 
suffer  neither  hardship  nor  inconvenience  if  compelled  to  pay 
the  plaintiffs  for  their  labor.  But  a  general  principle  is  to  be 
tested,  not  by  its  operation  in  an  individual  case,  but  by  its 
general  workings.  If  a  mechanic  employed  to  alter  one  man's 
dwelling  house,  shall  by  mistake  go  to  another  which  happens 
to  be  unoccupied,  and  before  his  mistake  is  discovered,  at  a  large 
expenditure  of  labor  shall  thoroughly  overhaul  and  change  it, 
will  it  be  said  that  the  owner,  who  did  not  desire  his  house  dis- 
turbed, must  either  abandon  it  altogether,  or  if  he  takes  pos- 
session, must  pay  for  labor  expended  upon  it  which  he  neither 
contracted  for,  desired  nor  consented  to?  And  if  so,  what 
bounds  can  be  prescribed  to  which  the  application  of  this  doc- 
trine can  be  limited  ?  The  man  who  by  mistake  carries  off  the 
property  of  another  will  next  be  demanding  payment  for  the 
transportation ;  and  the  only  person  reasonably  secure  against 
demands  he  never  assented  to  create,  will  be  the  person  who, 
possessing  nothing,  is  thereby  protected  against  anything 
being  accidentally  improved  by  another  at  his  cost  and  to  his 
ruin."  l 

This  rule  seems  inconsistent  with  that  governing  the  measure 
of  damages  in  conversion.  According  to  the  weight  of  modern 
authority,  while  a  willful  converter  may  be  required  to  answer 
for  the  value  of  the  property  as  enhanced  by  improvements 

1  Accord:  GasMns  v.  Davis,  1894,  115  N.  C.  85;  20  S.  E.  188;  25 
L.  R.  A.  813 ;  44  Am.  St.  Rep.  439. 

305 


§  190]  MISRELIANCE   ON  OWNERSHIP  OF  PROPERTY      [Part  I 

which  he  has  made  upon  it,  one  who  converts  goods  by  mistake 
is  liable  only  to  the  extent  of  the  value  of  the  goods  at  the 
time  and  place  of  the  original  conversion.1  According  to  some 
of  the  authorities,  this  means  simply  that  against  an  innocent 
converter  exemplary  or  punitive  damages  may  not  be  recovered. 
But  in  the  case  of  Trustees  of  Dartmouth  College  v.  Inter- 
national Paper  Company,2  Judge  LOWELL  points  out  that 
exemplary  damages  do  not  depend  upon  the  improvement  of 
the  thing  converted  but  upon  the  bad  faith  of  the  converter, 
and  that  consequently  they  would  be  the  same  whether  the 
goods  were  enhanced  in  value  or  totally  destroyed.  The  true 
basis  of  the  rule,  he  contends,  is  that  a  converter  who  in  good 
faith  improves  another's  goods  acquires  a  right  to  an  allowance 


1  Livingstone  v.  Rawyards  Coal  Co.,  1880,  5  App.  Cas.  25,  (coal) ; 
Wooden-Ware  Co.  v.  United  States,  1882,  106  U.  S.  432 ;  1  S.  Ct.  398, 
(timber) ;  United  States  v.  Northern  Pac.  R.  Co.,  1895,  67  Fed.  890, 
(U.  S.  C.  C.,   Or.),    (value  of  standing   timber) ;    White  v.  Yawkey, 
1896,  108  Ala.  270 ;  19  So.  360 ;  42  L.  R.  A.  199 ;  54  Am.  St.  Rep.  159, 
(value  immediately  after  severance) ;   Eaton  v.  Langley,  1898,  65  Ark. 
448 ;  47  S.  W.  123 ;  12  L.  R.  A.  474,   (value  in  new  form,  less  labor, 
etc.,  not  exceeding  increase  in  value) ;  Maye  v.  Tappan,  1863,  23  Cal. 
306,  (value  of  gold  ore,  less  expense  of  extracting) ;  Winchester  v.  Craig, 
1876,  33  Mich.  205,  (value  of  timber  where  taken  or  market  value  less 
expense  of  preparation,  and  transportation) ;  Gates  v.  Rifle  Boom  Co., 
8188,  70  Mich.  309,  316 ;  38  N.  W.  245,  (value  of  standing  timber) ; 
King  v.  Merriman,  1887,  38  Minn.  47,  54 ;  35  N.  W.  570,  (value  of  stand- 
ing timber) ;  Beede  v.  Lamprey,  1888, 64  N.  H.  510 ;  15  Atl.  133  ;  10  Am. 
St.  Rep.  426,  (value  of  timber  immediately  after  severance) ;   Forsyth  v. 
Wells,  1861,  41  Pa.  St.  291 ;  80  Am.  Dec.  617,  (value  of  coal  in  place) ; 
Herdic  v.  Young,  1867,  55  Pa.  St.  176, 179 ;  93  Am.  Dec.  739,  (timber) ; 
(cf.  Lyon  ».  Gormley,  1866,  53  Pa.  St.  261,  265) ;  Single  v.  Schneider, 
1869,  24  Wis.  299,  303,  1872,  30  Wis.  570,   574,    (value  of   standing 
timber). 

The  rule  is  the  same  where  the  innocent  converter  sufficiently 
changes  the  nature  or  enhances  the  value  of  the  goods  to  acquire  title  to 
them  by  accession.  Lewis  v.  Courtright,  1889,  77  la.  190 ;  41  N.  W. 
615,  (hay) ;  Baker  v.  Meisch,  1890,  29  Neb.  227  ;  45  N.  W.  685,  (brick) ; 
Carpenter  v.  Lingenfelter,  1894,  42  Neb.  728;  60  N.  W.  1022;  32 
L.  R.  A.  422,  (hay) ;  Hyde  v.  Cookson,  1855,  21  Barb.  (N.  Y.  Sup.  Ct.) 
92,  (hides  made  into  leather) ;  Louis  Werner  Stave  Co.  v.  Pickering, 
1909,  55  Tex.  Civ.  App.  632;  119  S.  W.  333,  (timber  converted  into 
staves). 

2  1904,  132  Fed.  92  (C.  C.,  N.  H.). 

306 


Chap.  XIII]          IMPROVEMENT   OF   PERSONALTY  [§  190 

of  the  cost  of  his  improvements,  not  to  exceed  the  consequent 
enhancement  in  value  of  the  property  converted. 

It  is  submitted  that  if  an  innocent  converter  is  entitled  to 
an  allowance  when  sued  for  conversion,  he  ought  to  be  given 
affirmative  relief  when  the  owner  retakes  the  improved  property. 
The  denial  of  relief  in  the  latter  case  is  not  only  unjust  but 
against  public  policy,  for  as  Judge  LOWELL  says,1 "  if  the  plaintiff 
can  hold  his  improved  and  transmuted  property  which  he  has 
physically  retaken  without  allowance  to  the  defendant,  while 
in  an  action  he  can  recover  but  a  small  part  of  the  value  of  this 
improved  property,  the  plaintiff  will  be  disposed  to  resort  to 
physical  recovery  without  the  aid  of  the  law,  even  if  force  and 
a  breach  of  the  peace  be  the  result."  This  consideration  clearly 
outweighs  the  supposed  danger  of  encouraging  heedlessness  and 
perjury  to  which  Judge  COOLEY  referred  in  Isle  Royale  Mining 
Company  v.  Hertin.2  And  if  it  be  contended  that  to  allow  the 
converter  to  recover  would  be  to  compel  the  owner,  in  many 
cases,  to  pay  for  improvements  not  desired  by  him,  the  answer 
is  that  he  may  elect,  in  every  case,  to  let  the  converter  keep 
the  property  and  to  recover  the  damages  actually  suffered  as  a 
result  of  its  conversion. 

1  Trustees  of  Dartmouth  College  v.  International  Paper  Co.,  1904, 
132  Fed.  92,  97  (C.  C.,  N.  H.). 

2  1877,  37  Mich.  332 ;  26  Am.  Rep.  520. 


307 


PART  II 

BENEFITS  CONFERRED  THROUGH  DUTIFUL  INTERVEN- 
TION  IN   ANOTHER'S  AFFAIRS 

CHAPTER    XIV 

GENERAL   PRINCIPLES   AND   SUNDRY   INSTANCES   OF  THE 
OBLIGATION 

§  191.  In  general. 

§  192.  (I)  Dutiful  intervention. 

§  193.  (1)  The  discharge  of  another's  obligation. 

§  194.  (a)  Actual  performance  a  matter  of  public  concern. 

§  195.  (b)  Default  of  the  obligor. 

§  196.  (c)  The  plaintiff  an  appropriate  intervenor. 

§  197.  (2)  The  preservation  of  life  or  property. 

§  198.  (II)  The  receipt  of  benefit  by  defendant. 

§  199.  (Ill)  Retention  of  benefit  inequitable :  Gratuitous  intervention. 

§  200.  (IV)  Sundry  instances  of  the  obligation. 

§  201.  (1)  Preservation  of  life  :   Services  in  emergency. 

§  202.  (2)  Necessaries  furnished  infant  or  insane  person. 

§  203.  (3)  Necessaries  furnished  wife  or  children. 

§  204.  (4)  Necessaries  furnished  pauper. 

§  205.  (5)  Burial  of  the  dead. 

§  206.  (6)  Preservation  of  property :  Maritime  salvage. 

§  207.  Same :  Salvage  at  the  common  law. 

§  208.  (7)  Repairs  by  a  co-tenant. 

§  209.  (8)  Performance  of  another's  contractual  duty. 

§  210.  (9)  Performance  of  another's  statutory  duty  to  repair  roads. 

§191.  In  general. — One  of  the  principal  classes  of  quasi 
contractual  obligations  in  the  Roman  law  was  Negotiorum 
Gestio,  a  sort  of  "  spontaneous  agency  "  or  justifiable  interven- 
tion in  another's  affairs  in  his  absence  and  without  his  authority. 
The  doctrine  was  expounded  in  the  Institutes  of  Justinian  as 
follows : 

"Thus,  if  one  man  has  managed  the  business  of  another 
during  the  latter's  absence,  each  can  sue  the  other  by  the  action 
on  uncommissioned  agency;  the  direct  action  being  available 

308 


Chap.  XIV]  IN   GENERAL  [§  191 

to  him  whose  business  was  managed,  the  contrary  action  to 
him  who  managed  it.  It  is  clear  that  these  actions  cannot 
properly  be  said  to  originate  in  a  contract,  for  their  peculiarity 
is  that  they  lie  only  where  one  man  has  come  forward  and 
managed  the  business  of  another  without  having  received  any 
commission  so  to  do,  and  that  other  is  thereby  laid  under  legal 
obligation  even  though  he  knows  nothing  of  what  has  taken 
place.  The  reason  of  this  is  the  general  convenience;  other- 
wise people  might  be  summoned  away  by  some  sudden  event 
of  pressing  importance,  and  without  commissioning  any  one  to 
look  after  and  manage  their  affairs,  the  result  of  which  would 
be  that  during  their  absence  those  affairs  would  be  entirely 
neglected :  and  of  course  no  one  would  be  likely  to  attend  to 
them  if  he  were  to  have  no  action  for  the  recovery  of  any  outlay 
he  might  have  incurred  in  so  doing.  Conversely,  as  the  un- 
commissioned agent,  if  his  management  is  good,  lays  his  prin- 
cipal under  a  legal  obligation,  so  too  he  is  himself  answerable 
to  the  latter  for  an  account  of  his  management ;  and  herein  he 
must  show  that  he  has  satisfied  the  highest  standard  of  careful- 
ness, for  to  have  displayed  such  carefulness  as  he  is  wont  to 
exercise  in  his  own  affairs  is  not  enough,  if  only  a  more  diligent 
person  could  have  managed  the  business  better."  * 

Although  retained  in  the  modern  Continental  codes 2  and  in 
the  law  of  Louisiana,3  this  doctrine  has  never  been  adopted  in 
its  entirety  by  the  common  law.  There  are  various  cases, 
however,  often  regarded  as  diverse  in  principle,  in  which  some- 
thing like  negotiorum  gestio  is  recognized.  The  following  is 
believed  to  be  a  safe  generalization :  One  who,  through  a 
dutiful  intervention  in  another's  affairs,  i.e.  an  intervention 
required  by  a  sense  of  duty,  though  not  by  law,  confers  a  benefit 
for  which  the  recipient  ought  in  justice  to  pay,  is  entitled  to 
compensation. 

1  Book  III,  Title  XXVII,  De  Obligationibus  Quasi  ex  Contractu,  as 
translated  in  Scott,  "Cases  on  Quasi-Contracts,"  p.  1. 

2  See  French  Civil  Code  (English  translation  by  Blackwood  Wright), 
arts.  1372-75;  Italian  Civil  Code  (French  translation  by  Prudhomme), 
arts.   1141-44;    Spanish  Civil   Code    (Falcon's    ed.),  arts.    1888-94; 
2  Windschied,  "Pandektenrecht,"  §§  430,  431. 

3  Martin's    Revised    Civil    Code,    arts.    2295-99 ;    Police    Jury    v. 
Hampton,  1827,  5  Mart.  (N.  S.)  389. 

309 


§  194]  DUTIFUL   INTERVENTION  [Part  II 

The  essential  elements  of  the  obligation  will  first  be  con- 
sidered upon  principle,  and  then  sundry  instances  in  which  it 
'arises  will  be  examined. 

§  192.  (I)  Dutiful  intervention.  —  Broadly  speaking,  the 
ways  in  which  one  may  intervene  in  another's  affairs  to  the 
latter's  advantage  are  multifarious.  Acts  of  beneficial  inter- 
vention which  may  result  in  quasi  contractual  obligation,  how- 
ever, fall  within  the  following  classes : 

(1)  The  discharge  of  another's  legal  obligation. 

(2)  The  preservation  of  another's  life  or  property. 

Under  what  circumstances  may  intervention  for  either  of 
these  purposes  be  said  to  be  a  dutiful  intervention? 

§  193.  (1)  The  discharge  of  another's  obligation.  — The  per- 
formance of  another's  legal  obligation  may  be  regarded  as 
dutiful,  if  it  appears : 

(a)  That  the  obligation  is  of  such  a  nature  that  actual  and 
prompt  performance  of  it  is  of  grave  public  concern. 

(6)  That  the  person  upon  whom  the  obligation  rests  has 
failed  or  refused,  with  knowledge  of  the  facts,  to  perform  it; 
or  that  it  reasonably  appears  that  it  is  impossible  for  him  to 
perform  it. 

(c)  That  he  who  intervenes  is  under  the  circumstances  an 
appropriate  person. 

§  194.  (a)  Actual  performance  a  matter  of  public  concern.  — 
Professor  Keener  says  that  the  obligation  must  be  one  which 
is  imposed  "  because  of  the  interest  which  the  public  has  in 
its  performance."  1  This  seems  too  broad,  since  it  includes, 
apparently,  any  obligation  the  breach  of  which  constitutes  a 
criminal  offense.  If,  for  instance,  every  citizen  were  required 
by  the  tax  law  to  file  a  statement  of  all  property  owned  by  him 
and  it  were  made  a  misdemeanor  to  neglect  so  to  do,  the 
public  would  be  interested,  in  a  sense,  in  the  performance  of 
this  obligation ;  yet  it  is  improbable  that  a  person  who  per- 
formed the  duty  for  another  without  authority  would  under 
any  circumstances  be  permitted  to  recover  the  value  of  his 
service.  The  true  limitation,  it  is  believed,  is  that  the  obliga- 
1  "Quasi-Contracts,"  p.  341. 
310 


Chap.  XIV]      DISCHARGE    OF   ANOTHER'S   OBLIGATION          [§  195 

tion  must  be  such  that  actual  and  prompt  performance  of  it 
as  distinguished  from  the  payment  of  a  penalty  for  non-per- 
formance, is  a  matter  of  grave  public  concern.  The  obligation 
of  a  man  to  support  his  wife  is  perhaps  the  best  example  that 
can  be  given.  The  moral  sense  of  the  community  requires  that 
such  an  obligation  be  actually  performed ;  the  imposition  of 
a  penalty  for  its  non-performance  is  not  enough.  If,  therefore, 
the  person  upon  whom  the  obligation  rests  fails  to  perform 
it,  intervention  is  clearly  a  duty. 

§  195.  (6)  Default  of  the  obligor.  —  The  performance  of  an- 
other person's  obligation  is  clearly  not  required,  so  long  as 
there  is  a  probability  that  the  obligor  will  perform  it  with 
reasonable  promptness  himself.  It  follows  that  one  who  seeks 
restitution  for  a  benefit  so  conferred  must  show,  ordinarily, 
that  the  defendant  had  notice  or  knowledge  of  the  facts  giving 
rise  to  his  obligation  and  either  refused  to  perform  it  or  failed 
to  perform  it  within  a  reasonable  time.1  But  if  it  appears 
that  by  reason  of  the  urgency  of  the  duty  or  the  distance  of 
the  defendant,  prompt  performance  by  him  was  impossible, 
notice  or  knowledge  of  the  facts  need  not  be  shown.  Thus,  a 
physician  suing  a  father  for  services  in  attending  a  child,  which 
services  were  not  contracted  for  by  the  father,  should  be  re- 
quired to  establish  either  that  the  father  was  notified  of  the 
child's  illness  and  refused  or  failed  to  employ  a  physician,  or 
that  because  of  the  extremity  of  the  child's  condition  or  the 
inaccessibility  of  the  father,  notice  would  have  been  of  no 
avail.2 

§  196.  (c)  The  plaintiff  an  appropriate  intervenor.  —  The  cir- 
cumstances of  a  case  not  infrequently  point  to  a  particular 
person  as  the  one  who  may  with  propriety  intervene.  Thus, 

1  Manhattan  Fire  Alarm  Co.  v.  Weber,  1898,  22  Misc.  R.  729 ; 
50  N.  Y.  Supp.  42.     Action  against  the  lessee  of  a  theater,  for  the  value 
of  the  maintenance  of  a  fire  alarm  system  installed  for  a  former  lessee. 
"Moreover,"  said  the  court,  "the  record  fails  to  disclose  whether  or 
not  any  other  fire  alarm  system  was  provided  by  the  defendants  during 
the  period  in  question." 

2  See   Dunbar  v.  Williams,   1813,  10  Johns.    (N.  Y.)  249,  (medical 
attendance  on  a  slave). 

311 


§  198]  DUTIFUL   INTERVENTION  [Part  II 

in  a  case  requiring  the  payment  of  funeral  expenses,  a  relative, 
friend,  or  neighbor  may  more  appropriately  intervene  than  a 
stranger  (post,  §  205).  So,  where  the  law  required  a  theater 
lessee  to  maintain  a  fire  alarm  system  and  clothed  certain  public- 
officers  with  ample  power  to  compel  him  to  discharge  the  duty, 
it  was  held  inappropriate  for  a  company  engaged  in  the  business 
of  installing  and  maintaining  fire  alarm  systems  to  intervene.1 
One  who,  in  disregard  of  the  obvious  proprieties,  pushes  in 
ahead  of  a  more  suitable  person,  is  an  officious  meddler  and  is 
not  entitled  to  compensation.2 

§  197.  (2)  The  preservation  of  lif Q  or  property. — The  preser- 
vation of  another's  life  is  always  dutiful.  The  preservation  of 
another's  property  may  be  regarded  as  dutiful  if  it  appears  that 
the  danger  to  the  property  is  so  imminent  that  notice  probably 
cannot  be  given  to  the  owner  in  time  to  enable  him  to  take  the 
necessary  steps  to  preserve  it,  or  that  probably  he  will  be  un- 
able, without  assistance,  to  preserve  it.  The  fact  that  the 
owner  neglects  or  is  unwilling  to  take  the  necessary  steps  to 
protect  his  property  is  not  enough.3  • 

§  198.  (II)  The  receipt  of  benefit  by  defendant.  —  The  per- 
formance of  one's  legal  obligation  is  necessarily  a  benefit  to  him, 
since  it  saves  him  the  necessity  either  of  performing  the  duty 
himself  or  of  paying  the  penalty  of  non-performance.  The 
protection  of  one's  property,  on  the  other  hand,  may  not  con- 
stitute a  benefit,  for  one  is  not  bound  to  protect  his  own  prop- 
erty, and  does  not  always  regard  it  as  worth  the  effort  and 
expense  necessary  to  its  protection.  This  was  recognized  in  the 
Massachusetts  case  of  Earle  v.  Coburn,4  which  was  an  action 

1  Manhattan  Fire  Alarm  Co.  v.  Weber,  1898,  22  Misc.  R.  729 ; 
50  N.  Y.  Supp.  42. 

2  Quin  o.  Hill,  1886,  4  Dem.  (N.  Y.  Surrogate's  Court)  69,  (mother, 
disregarding  husband's  rights,  directed  and  paid  for  daughter's  burial) ; 
Manhattan  Fire  Alarm  Co.  v.  Weber,  1898,  22  Misc.  R.  729 ;  50  N.  Y. 
Supp.  42. 

3  Mulligan  v.  Kenny,  1882,  34  La.  Ann.  50.     There  may  be  an  excep- 
tion in  case  of  the  protection  of  another's  animal.     See  Great  Northern 
R.  Co.  v.  Swaffield,  1874,  L.  R.  9  Exch.  132. 

4  1881,  130  Mass.  596,  598.     Accord:   Keith  v.  De  Bussigney,  1901, 
179  Mass.  255;  60  N.  E.  614. 

312 


Chap.  XIV]     RETENTION   OF   BENEFIT   INEQUITABLE  [§199 

for  the  board  and  stabling  of  a  horse.  The  plaintiff  had  ex- 
changed the  horse  in  question  with  the  defendant  for  a  wagon, 
but  controversy  arising,  the  defendant  returned  the  horse  and 
demanded  the  wagon.  The  plaintiff  refusing  to  give  up  the 
wagon,  the  defendant  sued  the  plaintiff  for  conversion,  but 
without  success.  The  plaintiff  told  the  defendant,  when  the 
latter  returned  the  horse,  that  he  left  it  on  his  own  responsi- 
bility and  expense,  but  the  defendant  disclaimed  ownership 
and  responsibility.  Said  the  court : 

"There  may  be  cases  where  the  law  will  imply  a  promise  to 
pay  by  a  party  who  protests  he  will  not  pay;  but  those  are 
cases  in  which  the  law  creates  a  duty  to  perform  that  for  which 
it  implies  a  promise  to  pay,  notwithstanding  the  party  owing  the 
duty  absolutely  refuses  to  enter  into  an  obligation  to  perform 
it.  The  law  promises  in  his  stead  and  in  his  behalf.  If  a  man 
absolutely  refuses  to  furnish  food  and  clothing  to  his  wife  or 
minor  children,  there  may  be  circumstances  under  which  the  law 
will  compel  him  to  perform  his  obligations,  and  will  of  its  own 
force  imply  a  promise  against  his  protestation.  But  such 
promise  will  never  be  implied  against  his  protest,  except  in 
cases  where  the  law  itself  imposes  a  duty :  and  this  duty  must 
be  a  legal  duty." 

In  cases  of  the  protection  of  property,  therefore,  it  must 
appear  that  the  particular  property  which  the  plaintiff  inter- 
vened to  protect  was  worth,  in  the  defendant's  eyes,  as  much 
as  he  is  called  upon  to  pay  the  plaintiff  for  its  protection.  And 
if  the  plaintiff  is  entitled  to  recover  the  value  of  his  services, 
it  would  seem  that  the  defendant  should  always  enjoy  the 
option  of  surrendering  to  the  plaintiff  the  property  protected 
instead  of  paying  for  its  protection. 

§  199.  (Ill)  Retention  of  benefit  inequitable :  Gratuitous 
intervention.  —  Although  instances  of  benefits  conferred  by 
dutiful  intervention  in  another's  affairs  are  probably  as  fre- 
quent as  those  of  benefits  conferred  by  mistake,  or  compulsion, 
the  topic  is  reduced  to  a  comparatively  narrow  compass  by  the 
fact  that  in  most  cases  of  such  intervention,  the  benefit  is  con- 

313 


§  201]  DUTIFUL    INTERVENTION  [Part  II 

ferred  without  expectation  of  compensation,  and  there  is  con- 
sequently no  injustice  in  the  retention  of  the  benefit.1 

§  200.  (IV)  Sundry  instances  of  the  obligation.  —  For  con- 
venience, sundry  instances  in  which  the  obligation  may  arise 
will  be  considered  in  the  following  groups : 

(1)  Preservation  of  life. 

(2)  Necessaries  furnished  infant  or  insane  person. 

(3)  Necessaries  furnished  wife  or  children. 

(4)  Necessaries  furnished  pauper. 

(5)  Burial  of  the  dead. 

(6)  Preservation  of  property. 

(7)  Performance  of  another's  contractual  duty. 

(8)  Performance  of  another's  statutory  duty  to  repair  roads. 
§  201.    (1)    Preservation   of  life :     Services  in   emergency.  — 

It  seems  to  be  taken  for  granted  that  at  the  common  law  there 
is  no  legal  obligation,  independent  of  contract,  to  pay  for  non- 
professional  services  rendered,  in  an  emergency,  in  the  preserva- 
tion of  life.  The  intervention  may  be  dutiful ;  the  conduct 
of  the  intervenor  may  be  heroic.  But  as  in  the  cases  of  preser- 
vation of  property,  hereafter  to  be  considered,  there  is  an  irre^- 
buttable  presumption,  based  either  upon  considerations  of 
policy  or  upon  knowledge  of  normal  human  conduct,  that  the 
service  is  intended  to  be  gratuitous.2 

The  considerations  which  underlie  the  irrebuttable  presump- 
tion just  referred  to  have  no  application  in  the  case  of  profes- 
sional services  —  as  of  a  physician  or  nurse.  For  while  such 
services  are  usually  prompted,  in  greater  or  less  measure, 
by  motives  of  humanity,  they  are  generally  rendered  with  the 

1  But  see  France's  Est.,  1874,  75  Pa.  St.  220,  225,  where  a  widow 
paid  funeral  expenses  of  her  husband  and  subsequently  sought  to  hold 
the  estate    liable.     Said    MERCUR,  J. :  "Nor   does  the  fact  that  the 
widow  said  to  a  stranger,  she  did  not  intend  any  one  else  to  pay  the 
expenses,  and  that  she  did  it  voluntarily  out  of  respect  to  her  husband, 
constitute  any  bar  to  her  right  to  recover  them." 

2  The  admiralty  law  allows  a  recovery  for  the  saving  of   life  where 
property  is  saved  to  form  a  fund  from  which  the  life  salvage  may  be 
paid.     The  Renpor,  1883,  8  P.  D.  115.     And  the  English  Merchant 
Shipping  Act,  1854  (17  &  18  Viet.  c.  104,  §  459),  provides   for   life 
salvage.     See  The  Gas  Float  Whitton,  [1896]  P.  42,  57. 

314 


Chap.  XIV]  PRESERVATION   OP   LIFE  [§  201 

expectation  of  compensation.  Moreover,  in  the  case  of  a 
physician  or  nurse,  there  is  nothing  unworthy  in  such  an  ex- 
pectation. It  follows  that  for  professional  services,  unless 
there  is  evidence  either  that  credit  was  extended  to  a  third 
party  1  or  that  there  was  no  intention  to  charge,  the  beneficiary 
should  be  required  to  pay  reasonable  value.2 

An  interesting  question  is  presented  by  the  cases  in  which 
it  is  held  that  a  railroad  company  is  liable  for  services  rendered 
to  an  injured  person,  in  an  emergency,  by  a  physician  em- 
ployed, in  the  absence  of  any  general  officer,  by  the  highest 
subordinate  representative  of  the  company  on  the  ground.3 
The  decisions  rest,  ostensibly,  upon  the  theory  of  a  contract 
between  the  physician  and  the  company.  It  seems  clear, 
however,  that  a  conductor  or  other  subordinate  servant  of  the 
company  has  no  actual  implied  authority  to  employ  a  phy- 
sician, and  that  consequently  there  is  no  genuine  contract. 


1  Brandner  v.  Krebbs,  1894,  54  111.  App.  652,  (physician). 

2  Cotnam  ».  Wisdom,  1907,  83  Ark.  601,  104  S.  W.  164 ;   12  L.  R.  A. 
(N.  S.)  1090;   119  Am.  St.  Rep.  157,  (physician).     See,  anticipating  the 
decision  in  Cotnam  v.  Wisdom,  supra,  Richardson  v.  Strong,   1851, 
13  Ired.  Law  (35  N.  C.)  106,  108 ;    55  Am.  Dec.  430,  where  RUFFIN, 
C.J.,  in  holding  that  a  lunatic  is  liable  for  the  services  of  a  nurse  and 
guard,  as  necessaries,  said:    "It  is  as  if  a  physician  administered  to  a 
man  deprived  of  his  senses  by  a  dangerous  blow,  when  the  loss  of  life 
might  result  from  delay.     He  would  certainly  be  bound  to  make  rea- 
sonable remuneration,  though  incapable  at  the  moment  of  making  an 
actual  request."     Also  Bishop,  "Contracts,  "  §  231 :  "Should  a  medical 
practitioner  be  called  by  an  unauthorized  person  to  a  man  deprived  of 
his  senses  by  a  blow,  rendering  immediate  relief  necessary  to  save  life, 
duty  would  require  it  to  be  given.     And,  if  he  gave  it,  not  in  charity 
but  expecting  to  be  paid,  the  law  would  create  a  promise  of  payment 
from  the  patient,  who,  in  fact,  not  even  asked  for  the  aid,  or  consented 
to  its  being  rendered;   being  incapable  of  asking  or  consenting."     See 
also  Raoul  v.  Newman,  1877,  59  Ga.  408,  413 ;  Pray  v.  Stinson,  1842, 
21  Me.  402;    Edson  v.  Hammond,  1911,  127  N.  Y.  Supp.  359,  361; 
142  App.  Div.  693. 

3  Ark.,  etc.,  R.  Co.  v.  Loughridge,  1898,  65  Ark.  300 ;  45  S.  W.  907 ; 
Bonnette  v.  St.  Louis,  etc.,  R.  Co.,  1908,  87  Ark.  197;   112  S.  W.  220; 
16  L.  R.  A.  (N.  S.)  1081 ;  128  Am.  St.  Rep.  30;   Chicago,  etc.,  R.  Co. 
v.  Davis,  1900,  94  111.  App.  54 ;  Terre  Haute,  etc.,  R.  Co.  v.  McMurray, 
1884,  98  Ind.  358 ;  49  Am.  Rep.  752 ;  Southern  R.  Co.  v.  Brister,  1901, 
79  Miss.  761 ;  31  So.  440. 

315 


§  202]  DUTIFUL   INTERVENTION  [Part  II 

Upon  principle,  whether  or  not  there  is  a  quasi  contractual 
obligation  depends  upon  the  duty  of  the  company  to  the  per- 
son injured  (see  ante,  §  194).  If,  in  a  particular  case,  it  can  be 
said  that  the  company  is  under  a  legal  duty  to  provide  the 
person  injured  with  medical  or  surgical  attendance,  the  phy- 
sician is  in  the  position  of  one  who  dutifully  intervenes  in  the 
company's  affairs  and  performs  its  obligation.  But  if  the  com- 
pany owes  no  such  duty  to  the  person  injured,  there  is  no 
satisfactory  basis  upon  which  it  may  be  held  responsible  to  the 
physician.  The  question  as  to  the  duty  of  the  company  to 
the  person  injured  pertains  to  the  law  of  tort  or  of  carriers 
and  need  not  be  considered  here. 

§  202.  (2)  Necessaries  furnished  infant  or  insane  person.  — 
The  presumption  that  services  rendered  in  the  preservation  of 
life  are  gratuitous  arises  only  in  cases  of  emergency.  For 
necessaries  of  life  furnished  in  a  non-emergency  case,  therefore, 
the  intervenor  should  recover.  Where  the  recipient  is  a  com- 
petent adult,  the  acceptance  of  the  tendered  benefit  results  in 
a  binding  contractual  obligation  to  pay  the  reasonable  value 
thereof.  But  where  the  recipient  is  an  infant  or  a  person  non 
compos  mentis,  the  acceptance  of  food,  clothing,  or  shelter  can- 
not be  regarded  in  every  case  as  raising  a  genuine  implied 
promise,  and  even  when  such  a  promise  is  raised  it  is  voidable. 
In  the  case  of  necessaries  furnished  to  an  infant  or  insane  per- 
son, therefore,  the  obligation  to  pay  the  reasonable  value 
thereof  is  quasi  contractual.1  It  is  a  clear  case  of  dutiful  in- 
tervention (see  ante,  §  194)  and  the  obligation  is  everywhere 
recognized.2 

1  The  quasi  contractual  nature  of  the  obligation  is  shown  by  the 
cases  holding  that  an  express  promise  to  pay  for  necessaries  more 
than  they  are  reasonably  worth  cannot  be  enforced.     Beeler  v.  Young, 
1809,  1  Bibb  (4  Ky.)  519 ;  Earle  v.  Reed,  1845,  10  Mete.  (Mass.)  387 ; 
Locke  v.  Smith,  1860,  41  N.  H.  346,  352. 

2  Necessaries  furnished  infant:    Nash  v.  Inman,  [1908]  2  K.  B.  1 ; 
Barnes  v.  Barnes,  1883,  50  Conn.  572 ;   Watson  v.  Cross,  1856,  2  Duv. 
(63  Ky.)   147;   Kilgore  v.  Rich,  1891,  83  Me.  305;   22  Atl.  176;    12 
L.  R.  A.  859 ;  23  Am.  St.  Rep.  780 ;  McConnell  v.  McConnell,  1909, 
75  N.  H.  385;   74  Atl.  875;   Werner's  Appeal,  1879,  91  Pa.  St.  222; 
Bradley  v.  Pratt,  1851,  23  Vt.  378. 

316 


Chap.  XIV]  NECESSARIES   FURNISHED   WIFE  [§  203 

§  203.  (3)  Necessaries  furnished  (a)  'Wife  or  (6)  children.  - 
(a)  The  husband  is  under  a  plain  legal  duty  to  support  his  wife, 
unless  she  lives  apart  from  him  without  his  fault.  If  he  fails 
to  perform  this  duty,  one  who  furnishes  necessaries  to  her  may 
recover  from  him  the  reasonable  value  thereof.1  It  is  often 
said  that  the  wife,  under  such  circumstances,  is  to  be  regarded 
as  the  "  agent  of  necessity  "  of  her  husband,  but  unquestion- 
ably the  real  basis  of  the  obligation  is  the  quasi  contractual 
doctrine  of  dutiful  intervention. 

(6)  Inconceivable  as  it  may  seem,  there  is  actually  a  differ- 
ence of  judicial  opinion  as  to  the  existence,  at  the  common 
law,  of  an  obligation  on  the  part  of  the  parent  to  support  his 
infant  child.2  Wherever  it  is  held  that  such  an  obligation  does 
exist,  it  is  clear,  upon  principle  (see  ante,  §  194)  and  authority, 
that  if  the  parent  fails  to  discharge  it,  he  is  liable  to  a  third 
person  for  the  reasonable  value  of  necessaries  furnished  to  the 
child.3 


Necessaries  furnished  insane  person :  Baxter  v.  Earl  of  Portsmouth, 
1826,  5  Barn.  &  Cr.  170 ;  In  re  Rhodes,  1890,  44  Ch.  Div.  94  ;  Ex  parte 
Northington,  1861,  37  Ala.  496 ;  79  Am.  Dec.  67 ;  Estate  of  Yturburru, 
1901,  134  Cal.  567;  66  Pac.  729;  Michaels  v.  Central  Kentucky 
Asylum,  1904,  118  Ky.  445;  81  S.  W.  247,  (deduction  for  services  ren- 
dered by  insane  person) ;  D.  M.  Smith's  Comm.  v.  Forsythe,  1906, 28  Ky. 
Law  Rep.  1034 ;  90  S.  W.  1075 ;  Sawyer  v.  Lufkin,  1868,  56  Me.  308 ; 
Scevav.True,  1873,  53  N.  H.  627 ;  Richardson  v.  Strong,  1851,  13  Ired. 
Law  (35  N.  C.)  106 ;  55  Am.  Dec.  430. 

The  obligation  of  both  infant  and  insane  person  to  pay  for  neces- 
saries is  fully  considered  in  treatises  on  persons,  and  a  further  discussion 
in  this  work  would  be  profitless. 

1  Bolton  v.  Prentice,  1744,  2  Str.  1214;   Pierpont  v.  Wilson,   1881, 
49  Conn.  450;   Watkins  v.  De  Armond,  1883,  89  Ind.  553;   Baker  v. 
Oughton,  1906,  130  la.  35 ;   106  N.  W.  272 ;  Mayhew  v.  Thayer,  1857, 
8  Gray  (Mass.)  172 ;  Walker  v.  Laighton,  1855,  31  N.  H.  Ill ;  Clothier 
v.  Sigle,  1906,  73  N.  J.  L.  419 ;  63  Atl.  865. 

2  See  Tiffany,  "Persons  and  Domestic  Relations'!  (2d  ed.),  p.  251, 
and  cases  there  cited  and  discussed. 

3  Stanton  v.  Willson's  Extra.,  1808,  3  Day  (Conn.)  37 ;  3  Am.  Dec. 
255,  (cf.  Finch  v.  Finch,  1853,  22  Conn.  411,  420) ;  Watkins  v.  De  Ar- 
mond, 1883,  89  Ind.  553 ;  Porter  v.  Powell,  1890,  79  la.  151 ;  44  N.  W. 
295 ;  7  L.  R.  A.  176 ;  18  Am.  St.  Rep.  353 ;  Reynolds  v.  Sweetser,  1860, 
15  Gray  (Mass.)  78 ;  Hyde  v.  Leisenring,  1895,  107  Mich.  490 ;  65  N.  W. 
536 ;   Manning  ».  Wells,  1894,  8  Misc.  R.  646 ;   29  N.  Y.  Supp.  1044 ; 

317 


§  204]  DUTIFUL   INTERVENTION  [Part  II 

§  204.  (4)  Necessaries  furnished  pauper.  —  Municipal  or 
county  authorities  are  generally  required  by  statute  to  furnish 
aid  and  support  to  paupers,  although  the  enactments  are  far 
from  uniform  in  their  provisions.  If,  in  a  particular  case,  the 
proper  authorities,  after  reasonable  notice,  fail  to  discharge 
their  duty,  any  one  may  intervene  and  supply  food,  lodging, 
or  other  necessaries.1  But  if  notice  is  not  first  given  to  the 
authorities  (see  ante,  §  195),  there  can  be  no  recovery,2  except, 
perhaps,  for  medical  services  rendered  in  an  emergency.3  The 
case  of  one  public  corporation  furnishing  relief  to  a  pauper  for 
whose  support  another  corporation  is  responsible  is  generally 

Pretzinger  v.  Pretzinger,  1887,  45  Ohio  St.  452 ;  15  N.  E.  471 ;  4  Am. 
St.  Rep.  542.  But  see  Kelly  v.  Davis,  1870,  49  N.  H.  187  ;  6  Am.  Rep. 
499,  (cf.  Pidgin  v.  Cram,  1836,  8  N.  H.  350,  353). 

The  obligation  of  the  husband  to  pay  for  necessaries  furnished  his 
wife  or  children  is  fully  considered  in  treatises  on  persons  and  domestic 
relations,  and  a  further  discussion  of  it  in  this  book  would  be  profitless. 

1  Seagraves  v.  City  of  Alton,  1851,  13  111.  366 ;   Randolph  v.  Town  of 
Greenwood,  1905,  122  111.  App.  23 ;    Knight  v.  Fairneld,  1880,  70  Me. 
500 ;  Eckman  v.  Township  of  Brady,  1890,  81  Mich.  70 ;  45  N.  W.  502  ; 
Shreve  v.  Budd,  1802,  7  N.  J.  L.  431 ;  Trustees  of  Cincinnati  Township 
v.  Ogden,  1831,  5  Ohio  23.     In  some  States  recovery  is  denied,  although 
authorities  refuse  relief,  on  the  ground  that  the  statute  provides  the 
sole  manner  in  which  the  county  may  be  made  liable  for  support  of  the 
poor.     Otis  v.  Straff ord,  1839,  10  N.  H.  352  ;  St.  Luke's  Hospital  Assn. 
v.  Grand  Forks  County,  1898,  8  N.  D.  241 ;  77  N.  W.  598 ;  Houghton  v. 
Town  of  Danville,  1838,  10  Vt.  537  ;  Patrick  v.  Baldwin,  1901,  109  Wis. 
342 ;    85  N.  W.  274 ;    53  L.  R.  A.  613.     And  see  Miller  ».  Somerset, 
1817,  14  Mass.  396. 

2  Reynolds  v.  Board  of  Supervisors,  1881,  59  Miss.  132;    Marshall 
County  v.  Rivers,  1906,  88  Miss.  45 ;   40  So.  1007 ;    Duval  v.  Laclede 
County,  1855,  21  Mo.  396 ;   Hamilton  County  v.  Myers,  1888,  23  Neb. 
718 ;    37  N.  W.  623 ;    Smith  v.  Williams,  1895,  13  Misc.  R.  761 ;    35 
N.  Y.  Supp.  236 ;    Salsbury  t>.  City  of  Philadelphia,  1863,  44  Pa.  St. 
303 ;   Caswell  ».  Hazard,  1873,  10  R.  I.  490. 

3  County  of  Madison  v.  Haskell,  1895,  63  III.  App.  657 ;   Board  of 
Supervisors  v.  Gilbert,  1893,  70  Miss.  791 ;    12  So.  593 ;    Robbins  v. 
Town  of  Homer,  1905,  95  Minn.  201 ;  103  N.  W.  1023  ;  Board  of  Com'rs 
v.  Denebrink,  1907,  15  Wyo.  342 ;  89  Pac.  7 ;   9  L.  R.  A.  (N.  S.)  1234. 
And  see  Poor  District  of  Summit  v.  Byers,  1887,  8  Pa.  Cas.  222;    11 
Atl.  242.     But  see,  contra,     French  v.  Benton,   1862,  44  N.  H.  28; 
Gourley  v.  Allen,  1825,  5  Cow.  (N.  Y.)  644;   Caswell  v.  Hazard,  1873, 
10  R.  I.  490.     Cf.  Hendricks  v.  County  of  Chautauqua,  1886,  35  Kan. 
483;   11  Pac.  450. 

318 


Chap.  XIV]  BURIAL   OF  THE   DEAD  [§  205 

provided  for  by  statute.  It  has  been  held  that  there  is  no 
common  law  liability  to  reimburse,1  but,  fortunately,  there  is 
authority  to  the  contrary.2 

In  statutes  providing  for  the  support  of  the  poor,  a  liability 
for  such  support  is  often  imposed  upon  children,  parents,  or 
other  near  relatives.  Usually  the  procedure  for  enforcing  this 
obligation  is  prescribed,  but  in  the  absence  of  a  prescribed 
procedure  the  proper  authorities  may  furnish  the  support  and 
recover  the  value  thereof  from  those  upon  whom  the  obligation 
rests.3 

§  205.  (5)  Burial  of  the  dead :  obligation  of  (a)  estate,  (6) 
husband,  (c)  county.  —  (a)  It  is  settled  that  the  reasonable  and 
necessary  expenses  of  the  interment  of  the  body  of  a  deceased 
person  constitute  a  charge  against  his  estate.4  The  executor, 
therefore,  should  contract  for  such  interment  and  pay  the 
expenses.  Not  infrequently,  however,  it  is  impossible  or  im- 
practicable to  ascertain  at  once  who  is  named  as  executor,  and  to 
secure  his  authority.  If  no  executor  is  appointed,  it  is,  of 
course,  out  of  the  question  to  await  the  appointment  of  an 
administrator.  Such  a  situation  clearly  demands  that  some 
one  intervene  in  the  representative's  affairs  and  perform  his 
duty  for  him  (see  ante,  §  194).  And  for  the  benefit  conferred 
by  such  an  intervention  the  executor  or  administrator  must 
make  restitution : 

1  Otoe  County  v.  Lancaster  County,  1907,  78  Neb.  517;  111  N.  W. 
132 ;   Town  of  Morristown  v.  Town  of  Hardwick,  1908,  81  Vt.  31 ;   69 
Atl.  152. 

2  Town  of  Wethersfield  v.  Stanford,  1774, 1  Root  (Conn.)  68 ;  Bristol  v. 
New  Britain,  1898,  71  Conn.  201 ;  41  Atl.  548  ;  County  of  Perry  v.  City  of 
Du  Quoin,  1881,  99  111.  479 ;  City  of  Macomb  v.  County  of  McDonough, 
1907,  134  111.  App.  532 ;   Ogden  City  v.  Weber  County,  1903,  26  Utah 
129;    72  Pac.  433.     And  see    Overseers  of    North  Whitehall  v.  Over- 
seers of  South  Whitehall,  1817,  3  Serg.  &  R.  (Pa.),  117. 

3  McCook  County  v.  Kammoss,  1895,  7  S.  D.  558 ;  64  N.  W.  1123 ; 
31  L.  R.  A.  461 ;  58  Am.  St.  Rep.  854. 

4  Rogers  v.  Price,  1829,  3  Younge  &  J.  28 ;  Fogg  v.  Holbrook,  Extr., 
1895,  88  Me.  169 ;  33  Atl.  792 ;  33  L.  R.  A.  660 ;  Hapgood  ».  Houghton, 
1830,  10  Pick.  (Mass.)   154 ;   Constantinides  v.  Walsh,  Extr.,  1888,  146 
Mass.  281 ;  15  N.  E.  631 ;  4  Am.  St.  Rep.  311 ;  Patterson  v.  Patterson, 
1875,  59  N.  Y.  574 ;  17  Am.  Rep.  384. 

319 


§  205]  DUTIFUL   INTERVENTION  [Part  IT 

Rogers  v.  Price,  Executor,  1829,  3  Younge  &  J.  28 :  Assumpsit 
for  work  and  labor  as  an  undertaker  and  materials  furnished 
for  the  funeral  of  the  testator.  The  testator  died  at  the  house 
of  his  brother,  who  sent  for  the  plaintiff,  an  undertaker.  There 
was  no  evidence  of  any  contract  with  the  defendant,  or  that  he 
knew  of  the  funeral.  GARROW,  B.  (p.  34) :  "The  simple  ques- 
tion is,  nothwithstanding  many  ingenious  views  of  the  case 
have  been  presented,  who  is  answerable  for  the  expenses  of  the 
funeral  of  this  gentleman.  In  my  opinion,  the  executor  is 
liable.  Suppose  a  person  to  be  killed  by  accident  at  a  distance 
from  his  home ;  what,  in  such  a  case,  ought  to  be  done  ?  The 
common  principles  of  decency  and  humanity,  the  common 
impulses  of  our  nature,  would  direct  every  one,  as  a  preliminary 
step,  to  provide  a  decent  funeral,  at  the  expense  of  the  estate ; 
and  to  do  that  which  is  immediately  necessary  upon  the  subject, 
in  order  to  avoid  what,  if  not  provided  against,  may  become 
an  inconvenience  to  the  public.  Is  it  necessary  in  that  or  any 
other  case  to  wait  until  it  can  be  ascertained  whether  the  de- 
ceased has  left  a  will,  or  appointed  an  executor ;  or,  even  if  the 
executor  be  known,  can  it,  where  the  distance  is  great,  be 
necessary  to  have  communication  with  that  executor  before 
any  step  is  taken  in  the  performance  of  those  last  offices  which 
require  immediate  attention?  It  is  admitted  here  that  the 
funeral  was  suitable  to  the  degree  of  the  deceased,  and  upon 
this  record  it  must  be  taken  that  the  defendant  is  executor 
with  assets  sufficient  to  defray  this  demand ;  I  therefore  think 
that,  if  the  case  had  gone  to  the  jury,  they  would  have  found 
for  the  plaintiff,  and  that  therefore  this  rule  should  be  made 
absolute."  1 

1  Accord :  Tugwell  v.  Heyman,  1812,  3  Camp.  298 ;  Golsen  v.  Golsen, 
1906,  127  111.  App.  84;  Hildebrand  v.  Kinney,  1909,  172  Ind.  447; 
87  N.  E.  832  ;  Patterson  v.  Patterson,  1875,  59  N.  Y.  574 ;  17  Am.  Rep. 
384;  Ray  v.  Honeycutt,  1896,  119  N.  C.  510;  26  S.  E.  127,  (explaining 
Gregory  v.  Hooker's  Admr.,  1821,  1  Hawkes  (8  N.  C.)  394 ;  9  Am.  Dee. 
646);  France's  Est.,  1874,  75  Pa.  St.  220;  O'Reilly  v.  Kelly,  1900, 
22  R.  I.  151 ;  46  Atl.  681 ;  50  L.  R.  A.  483 ;  84  Am.  St.  Rep.  833 ; 
Waters  v.  Register,  1907,  76  S.  C.  132;  56  S.  E.  849.  In  Patterson  v. 
Patterson,  supra,  the  court  said  (p.  583) :  "And  our  Revised  Statutes 
(2  R.  S.  71,  sec.  16)  recognize  this  duty,  in  that  the  executor  is  prohib- 
ited from  any  interference  with  the  estate  until  after  probate,  except 
that  he  may  discharge  the  funeral  expenses.  From  this  duty  springs 
a  legal  obligation,  and  from  the  obligation  the  law  implies  a  promise 

320 


Chap.  XIV]  BURIAL    OF   THE    DEAD  [§  205 

The  circumstances  of  a  death  generally  point  to  a  particular 
person  as  the  one  who  may  suitably  intervene  to  pay  the  ex- 
penses of  interment.1  One  who  pushes  forward  without  justi- 
fication to  pay  such  expenses  is  an  officious  meddler  (see  ante, 
§  196)  and  is  not  entitled  to  restitution  out  of  the  estate  or 
from  the  person  primarily  liable.2 

(b)  Under  the  common  law,  it  was  the  duty  of  the  husband 
to  give  a  suitable  burial  to  the  body  of  his  deceased  wife,  and 
consequently  one  whto  performed  that  duty  in  the  absence  of 
the  husband,  or  upon  the  husband's  failure  to  perform  it  (see 
ante,  §  195),  could  recover  from  him  the  expenses  incurred 
therein : 

Jenkins  v.  Tucker,  1788,  1  H.  BI.  90:  Action  to  recover 
money  expended  in  paying  debts  and  defraying  funeral  expenses 
of  defendant's  wife,  who  was  plaintiff's  daughter  and  who  died 
while  the  defendant  was  in  Jamaica.  Lord  LOUGHBOROUGH 
(p.  93) :  "  I  think  there  was  a  sufficient  consideration  to  support 

to  him  who,  in  the  absence  or  neglect  of  the  executor,  not  officiously, 
but  in  the  necessity  of  the  case,  directs  a  burial  and  incurs  and  pays 
such  expense  thereof  as  is  reasonable.  It  is  analogous  to  the  duty  and 
obligation  of  a  father  to  furnish  necessaries  to  a  child,  and  of  a  husband 
to  a  wife,  from  which  the  law  implies  a  promise  to  pay  him  who  does 
what  the  father  or  the  husband,  in  that  respect,  omits.  .  .  .  The  decent 
burial  of  the  dead  is  a  matter  in  which  the  public  have  concern.  It  is 
against  the  public  health  if  it  do  not  take  place  at  all,  and  against  a 
proper  public  sentiment,  that  it  should  not  take  place  with  decency." 
See  also  McCullough  v.  McCready,  1907,  52  Misc.  542,  102  N.  Y.  Supp. 
633,  aff.  1907,  122  App.  Div.  888;  106  N.  Y.  Supp.  1135,  allowing 
expenses  of  a  wake  paid  by  a  nephew  of  decedent.  In  O'Reilly  v. 
Kelly,  supra,  the  claim  was  for  flowers  furnished  for  the  funeral ;  they 
were  held  "necessary." 

1  Jenkins  v.  Tucker,  1788,  1  H.  Bl.  90,  (father  of  married  woman  in 
the  absence  of  husband) ;  Rogers  v.  Price,  Extr.,  1829, 3  Younge  &  J.  28, 
(brother  in  whose  house  death  occurred) ;    Stone  v.  Tyack,  1911,  164 
Mich.  550 ;    129  N.  W.  694,  (step-father) ;  France's  Est.,  1874,  75  Pa. 
St.  220,  (widow) ;   O'Reilly  v.  Kelly,  1900,  22  R.  I.  151 ;   46  Atl.  681 ; 

50  L.  R.  A.  483 ;  84  Am.  St.  Rep.  833,  (housekeeper). 

2  Quin  v.  Hill,  1886,  4  Dem.  (N.  Y.  Surrogate's  Court)  69,  (mother). 
And  see  Foley  v.  Bushway,  1874,  71  111.  386,  (widow) ;  Lerch  v.  Emmett, 
1873,  44  Ind.  331,  (mother) ;  Fay  v.  Fay,  1887,  43  N.  J.  Eq.  438,  (admin- 
istrator of  decedent's  grandfather's  estate) ;   Samuel  v.  Thomas,  1881, 

51  Wis.  549;  8  N.  W.  361,  (sister). 

321 


§  205]  DUTIFUL   INTERVENTION  [Part  II 

this  action  for  the  funeral  expenses,  though  there  was  neither 
request  nor  assent  on  the  part  of  the  Defendant,  for  the  Plaintiff 
acted  in  discharge  of  a  duty  which  the  Defendant  was  under  a 
strict  legal  necessity  of  himself  performing,  and  which  common 
decency  required  at  his  hands ;  the  money  therefore  which  the 
Plaintiff  paid  on  this  account,  was  paid  to  the  use  of  the  De- 
fendant. A  father  also  seems  to  be  the  proper  person  to  inter- 
fere in  giving  directions  for  his  daughter's  funeral,  in  the  absence 
of  her  husband."  l 

But  under  the  modern  statutes  establishing  the  independent 
position  of  married  women  with  regard  to  their  property,  it 
would  seem  that  the  liability  of  the  estate  is  primary,  and  that 
the  husband  is  chargeable  only  in  the  event  that  the  estate  is 
insufficient  to  meet  the  obligation.  It  follows  that  when  a  mar- 
ried woman  dies  leaving  sufficient  property  to  pay  her  funeral 
expenses  and  the  circumstances  impose  upon  the  husband 
a  moral  duty  to  pay  them,  he  should  have  an  action  against 
the  executor  or  administrator  for  reimbursement.  It  has  been 
so  held,2  though  there  are  cases  to  the  contrary,3  some  of 
which  obviously  rest  upon  a  presumption  that  the  benefit  is 
conferred  gratuitously  (see  ante,  §  199). 

(c)   An  interesting  Missouri  case,   in  which  an  erroneous 

1  Accord:   Ambrose  v.  Kerrison,  1851,  10  C.  B.  776;    Bradshaw  v. 
Beard,  1862,  12  C.  B.  (N.  S.)  344 ;   Cunningham  v.  Reardon,  1868,  98 
Mass.  538;  96  Am.  Dec.  670;   Stone  v.  Tyack,  1911,  164  Mich.  550 
129  N.  W.  694 ;  Gleason  v.  Warner,  1899,  78  Minn.  405  ;  81  N.  W.  206. 

2  Lightbown  v.  McMyn,  1886,  33  Ch.  D.  575 ;    In  re  Skillman's 
Estate,  1910,  146  la.  601 ;   125  N.  W.  343 ;   140  Am.  St.  Rep.  295 ; 
Constantinides  v.  Walsh,  Extr.,  1888, 146  Mass.  281 ;   15  N.  E.  631 ;  4 
Am.  St.  Rep.  311 ;  Freeman  v.  Coit,  1882,  27  Hun  (N.  Y.  Sup.)  447 ; 
Quin  v.  Hill,  1886,  4  Dem.  (N.  Y.  Surrogate's  Court)  69 ;  Pache  v.  Op- 
penhehn,  1904,  93  App.  Div.  221 ;  87  N.  Y.  Supp.  704 ;   McClellan  v. 
Filson,  1886,  44  Ohio  St.  184 ;  5  N.  E.  861 ;  58  Am.  Rep.  814 ;  Moulton 
v.  Smith,  1888,  16  R.  I.  126 ;   12  Atl.  891 ;  27  Am.  St.  Rep.  728. 

3  Smyley  v.  Reese,  1875,  53  Ala.  89 ;  25  Am.  Rep.  598 ;   In  re  Wer- 
inger,  1893, 100  Cal.  345 ;  34  Pac.  825 ;  Staples'  Appeal,  1884,  52  Conn. 
425 ;   Kenyon  t;.  Brightwell,  1904,  120  Ga.  606 ;  48  S.  E.  124 ;  Brand's 
Extr.  v.  Brand,  1901,  109  Ky.  721 ;  22  Ky.  Law  Rep.  1366 ;  60  S.  W.  704, 
(c/.  Towery  v.  McGaw,  1900,  22  Ky.  Law  Rep.  155 ;  56  S.  W.  727) ; 
Stonesifer  v.  Shriver,  1904,  100  Md.  24 ;  59  Atl.  139 ;  Stone  v.  Tyack, 
1911,  164  Mich.  550;  129  N.  W.  694. 

322 


Chap.  XIV]  PRESERVATION    OF    PROPERTY  [§  206 

decision  would  seem  to  have  been  reached,  is  Duval  v.  Laclede 
County.1  The  plaintiff  paid  the  funeral  expenses  of  a  poor 
person  who  died  in  his  house  and  presented  a  claim  to  the 
county  court  pursuant  to  the  provisions  of  a  statute  prescrib- 
ing that  the  county  court  should  allow  such  sum  as  it  should 
deem  reasonable  for  the  funeral  expenses  of  any  person  who 
should  die  without  means  to  pay  such  funeral  expenses.  It 
was  held  by  the  Supreme  Court  that  the  plaintiff  was  not  en- 
titled to  an  allowance.  Said  the  court : 

"  Assuming  that  the  deceased  was  a  poor  person  of  the  county, 
and  that  the  burial  of  the  county  poor,  as  well  as  their  support 
during  life,  is  embraced  in  the  general  duty  to  take  care  of  them, 
...  it  would  be  against  all  principle  to  allow  the  plaintiff 
voluntarily  to  discharge  this  duty  for  the  county,  and  in  this 
manner  become  its  creditor,  without  its  consent,  for  services 
rendered,  or  money  expended,  in  taking  care  of  its  poor." 

SCOTT,  J.,  however,  entered  a  strong  dissent,  saying : 

"This  section,  I  conceive,  makes  it  the  imperative  duty  of 
the  county  to  pay  the  reasonable  expenses  of  burying  its  poor. 
The  law  did  not  intend  to  give  a  discretion  to  the  court,  whether 
it  would  pay  or  not.  For  the  sake  of  humanity,  it  intended 
that  every  man  who  would  bury  the  decaying  bodies  of  the  poor, 
should  be  paid.  In  such  cases,  there  is  no  time  to  wait  — 
there  is  no  time  to  consult  or  ask  advice,  and  therefore  the  law 
promises  to  pay  any  one  who  will  bury  the  body.  If  the  law  was 
such  that  the  party  would  only  be  paid  in  the  event  the  county 
court  thought  proper  to  do  so,  the  dead  body,  in  many  cases, 
might  go  unburied,  or  buried  in  such  a  manner  as  would  be  a 
a  disgrace  to  humanity." 

And  in  a  later  case 2  the  Supreme  Court  declared  that  if  it 
were  a  case  of  first  impression  they  might  be  inclined  to  follow 
the  views  of  Judge  SCOTT. 

§  206    (6)    Preservation    of   property :     Maritime    salvage.  - 
The  familiar  doctrine  of  salvage,  in  the  admiralty  law,  affords 

1  1855,  "21  Mo.  396,  397,  398. 

2  Handlin  v.  Morgan  County,  1874,  57  Mo.  114,  116. 

323 


§  206]  DUTIFUL   INTERVENTION  [Part  II 

a  striking  illustration  of  the  principle  of  dutiful  intervention  as 
applied  to  the  preservation  of  property.1  Salvage  is  defined 
as  compensation  allowed  to  persons  by  whose  assistance  a  ship 
or  its  cargo  or  both  have  been  saved,  in  whole  or  in  part,  from 
impending  peril,  or  recovered  from  actual  loss.  Obviously,  the 
essentails  of  quasi  contractual  liability  as  set  forth  in  the  pre- 
ceding sections  (ante,  §§  191,  192,  197)  are  all  present: 

1.  The  ship  or  cargo  must  be  in  such  peril  as  reasonably  to 
call  for  intervention.2 

2.  The  intervention  must  result  in  a  benefit  to  the  owner 
or  person  otherwise  interested  against  whom  claim  is  made.3 
That  is  to  say,  compensation  will  not  be  allowed,  however 
great  and  meritorious  are  the  claimant's  exertions,  if  the  prop- 
erty is  not  saved. 

3.  If  the  claimant  was  under  an  obligation  to  render  the 
services,4  or  through  his  fault  contributed  to  place  the  property 

1  The  City  of  Chester,  1884,  9  P.  D.  182.     Austin  cites  negotiorum 
gestio  in  the  Roman  Law  and  salvage  in  the  English  as  instances  of 
quasi  contract.     Austin,  "Jurisprudence"  (3d  ed.),  p.  944. 

2  Akerblom  v.  Price,  1881,  7  Q.  B.  D.  129 ;  The  Aglaia,  1888,  13  P.  D. 
160 ;   Seven  Coal  Barges,  1870,  2  Biss.  (U.  S.  C.  C.)  297 ;   Fed.  Cas. 
No.  12,677 ;  The  Plymouth  Rock,  1881,  9  Fed.  413,  (U.  S.  D.  C.  N.  Y.) ; 
The  Alamo,  1896,  75  Fed.  602 ;   21  C.  C.  A.  451 ;   41  U.  S.  App.  468 ; 
The  Mannie  Swan,  1906,  145  Fed.  747,  (U.  S.  D.  C.  N.  Y.) ;  The  New 
Haven,  1908,  159  Fed.  798,  (U.  S.  D.  C.  Conn.). 

3  The  Zephyrus,  1842,  1  W.  Rob.  329 ;   The  India,  1842,  1  W.  Rob. 
406;    The  Sabine,  1879,  101  U.  S.  384  r  The  City  of  Puebla,  1907, 
153  Fed.  925,  (U.  S.  D.  C.  Cal.) ;  The  Loch  Garve,  1910,  182  Fed.  519; 
105  C.    C.  A.  57.     In  The   Zephyrus,  supra,  Dr.  Lushington  said    (p. 
330) :  "Now  I  apprehend  that,  upon  general  principles,  a  mere  attempt 
to  save  the  vessel  and  cargo,  however  meritorious  that  attempt  may  be, 
or  whatever  degree  of  risk  or  danger  may  have  been  incurred,  if  unsuc- 
cessful, can  never  be  considered  in  this  Court  as  furnishing  any  title 
to  a  salvage  reward.     The  reason  is  obvious,  viz.  that  salvage  reward 
is  for  benefits  actually  conferred,  not  for  a  service  attempted  to  be  ren- 
dered." 

*  The  Branston,  1826,  2  Hagg.  Admr.  3 ;  The  Clarita,  1874,  23  Wall. 
1,  17  (semble) ;  The  Wave,  1827,  2  Paine  (U.  S.  C.  C.)  131 ;  Fed.  Cas. 
No.  17,300;  The  Holder  Borden,  1847,  1  Spr.  (U.  S.  D.  C.  Mass.)  144; 
Fed  Cas.  No.  6600 ;  The  Olive  Branch,  1868,  1  Lowell  (U.  S.  D.  C. 
Mass.)  286;  Fed.  Cas.  No.  10,490;  The  Brabo,  1887,  33  Fed.  884, 
(U.  S.  D.  C.  Ala.) ;  Kidney  v.  The  Ocean  Prince,  1889,  38  Fed.  259, 
(U.  S.  D.  C.  Tex.) ;  The  C.  P.  Minch,  1894,  61  Fed.  511,  (U.  S.  D.  C. 

324 


Chap.  XIV]  PRESERVATION   OF   PROPERTY  [§  206 

in  peril,1  or  was  guilty  of  willful  or  grossly  negligent  misconduct 
toward  the  defendant,2  the  retention  of  the  benefit  is  not  un- 
just, and  therefore  compensation  will  not  be  allowed. 

It  should  be  added  that  the  obligation  in  maritime  salvage 
cases  differs  from  that  in  cases  of  dutiful  intervention  under 
the  common  law  in  that  a  salvor,  under  the  maritime  law,  has 
a  lien  upon  the  proprety  saved,  which  enables  him  to  main- 
tain a  suit  in  rem  against  the  ship  or  cargo.  This  is  the  remedy 
commonly  pursued.  But  the  salvor,  at  his  election,  may  pro- 
ceed in  personam  against  the  owner  or  the  person  benefited  by 
the  service.3  And  the  action  in  personam  is  the  only  available 

N.  Y.);  Gilbraith  t>.  Stewart  Transp.  Co.,  1902,  121  Fed.  540;  57 
C.  C.  A.  602 ;  64  L.  R.  A.  193. 

1  Cargo  ex  Capella,  1867,  L.  R.  1  A.  &.  E.  356 ;  The  Due  d'Aumale, 
[1904]  P.  60;   The  Clarita,  1874,  23  Wall.  (U.  S.)  1 ;   American  Insur- 
ance Co.  v.  Johnson,  1827,  Bl.  &  H.  (U.  S.  D.  C..N.  Y.)  9;   Fed.  Cas. 
No.  303  ;  The  Charles  E.  Soper,  1883,  19  Fed.  844  (U.  S.  D.  C.  N.  Y.) ; 
The  Pine  Forest,  1904,   129  Fed.  700 ;   64  C.  C.  A.  228 ;    1  L.  R.  A. 
(N.  S.)  873. 

2  The  Capella,  [1892]   P.  70,  (taking  possession  against  protest  of 
ship's  officers  and  other  misconduct) ;    The  Blaireau,  1804,  2  Cranch 
(U.  S.)  240,  (misappropriation  of  part  of  the  property  saved) ;    The 
Bello  Corrunes,  1821,  6  Wheat.   (U.  S.)   152,  (stranding  the  vessel) ; 
The  Aberdeen,  1885,  27  Fed.  479,  (U.  S.  D.  C.),  (abandonment  of  vessel 
after  taking  possession);    The  Henry  Steers,  Jr.,  1901,  110  Fed.  578, 
(U.  S.  D.  C.  N.  Y.),  (abandonment) ;    The  Bremen,  1901,  111  Fed. 
228,  (U.  S.  D.  C.  N.  Y.),  (negligent  conduct  causing  fire,  practically 
extinguished,  to  break  out  again) ;  The  Olympia,  1909,  181  Fed.  187, 
(D.  C.  Fla.),  (obtaining  acquiescence  of  master  by  fraud) ;  The  Minnie 
E.  Kelton,  1910,  181  Fed.  237,  (U.  S.  D.  C.  Or.),  (unskillful  handling 
detracting  from  value  of  service). 

3  According  to  most  of  the  decisions  the  right  in  personam  is  limited 
to  cases  of  genuine  contract.     That  is  to  say,  the  salvor  is  restricted 
to  proceedings  in  rem,  unless  it  appears  that  the  owner  either  contracted 
for  his  services  in  advance,  or  in  consideration  of  the  surrender  to  him 
of  the  property  saved  expressly  or  impliedly  assumed  a  personal  lia- 
bility.    The  Elton,  [1891]  P.  265;  The  Sabine,  1879,  101  U.  S.  384; 
The  Emblem,  1840,  2  Ware  (Dav.  61)  (U.  S.  D.  C.  Me.)  68 ;  Fed.  Cas. 
No.  4434;   The  Independence,  1855,  2  Curtis  (U.  S.  C.  C.)  350;   Fed. 
Cas.   No.  7014 ;  Seaman  v.  Erie,  etc.,  R.  Co.  1868,  2  Ben.  (U.  S.  D.  C. 
N.  Y.)  128;    Fed.  Cas.  No.   12,582.     And   see   Admiralty    Rule   19, 
promulgated  by  the  United  States  Supreme  Court.     But  it  is  declared 
in  a  recent  English  decision  that  "the  action  in  personam  did  not  arise 
out  of  jurisdiction  in  rem,  and  that  the  distinction  between  actions  in 

325 


§  207]  DUTIFUL   INTERVENTION  [Part  II 

remedy  when  the  property  saved  is  subsequently  destroyed, 
or  seized  under  legal  process.1 

§  207.  Same  :  Salvage  at  the  common  law.  —  The  doctrine 
of  salvage  is  peculiar  to  admiralty  law,  the  common  law  rais- 
ing an  irrebuttable  presumption,  based  either  upon  considera- 
tions of  policy  or  upon  knowledge  of  normal  human  conduct, 
that  services  rendered  in  an  emergency  in  the  preservation  of 
prpperty,  like  emergency  services  in  the  preservation  of  life 
(ante,  §  201),  are  gratuitous: 

Bartholomew  v.  Jackson,  1822,  20  Johns.  (N.  Y.)  28;  11  Am. 
Dec.  237 :  Action  for  work  and  labor  in  removing  defendant's 
stack  of  wheat  from  the  plaintiff's  stubble  field.  The  defendant 
had  promised  to  remove  the  stack  in  due  season  for  preparing 
the  ground  for  a  fall  crop.  The  time  having  arrived,  the  plain- 
tiff sent  a  message  to  the  defendant,  which  is  his  absence  was 
delivered  to  his  family,  requesting  the  immediate  removal  of 
the  stack,  as  he  wished,  on  the  next  day,  to  burn  the  stubble. 
The  defendant's  sons  answered  that  they  would  remove  the 
stack  by  ten  o'clock  the  next  morning.  At  that  hour  the 
plaintiff  set  fire  to  the  stubble  in  a  remote  part  of  the  field, 
which  spread  rapidly  and  threatened  to  destroy  the  stack  of 
wheat.  Thereupon,  the  plaintiff,  seeing  that  the  defendant 
neglected  to  remove  the  stack,  removed  it  himself.  PLATT,  J. 
(p.  28) :  "The  plaintiff  performed  the  service  without  the 
privity  or  request  of  the  defendant;  and  there  was,  in  fact, 
no  promise,  express  or  implied.  If  a  man  humanely  bestows 
his  labor,  and  even  risks  his  life,  in  voluntarily  aiding  to  preserve 
his  neighbor's  house  from  destruction  by  fire,  the  law  considers 
the  service  rendered  as  gratuitous,  and  it,  therefore,  forms  no 
ground  of  action."  2 

personam  and  actions  in  rem  depended  only  on  whether  the  person  or 
property  of  the  defendant  was  arrested  in  the  first  instance."  The 
Cargo  ex  Port  Victor,  1901,  17  Times  L.  R.  378,  380.  And  see  The 
Hope,  1801,  3  C.  Rob.  215  and  note. 

1  Hudson  v.  Whitmire,  1896,  77  Fed.  846,  (U.  S.  D.  C.  Fla.).     And 
see  Five  Steel  Barges,  1890,  15  P.  D.  142.     But  see  The  Chieftain, 
1846,  4  Not.  of  Cas.  459. 

2  Accord:  Watson  v.  Ledoux,  1853, 8  La.  Ann.  68 ;  New  Orleans,  etc., 
R.  Co.  v.  Turcan,  1894,  46  La.  Ann.  155 ;    15  So.  187.     And  see  Falcke 
v.  Scottish  Imperial  Ins.  Co.,  1886,  34  Ch.  D.  234,  248,  in  which  Lord 

326 


Chap.  XIV]     PRESERVATION  OF  PROPERTY          [§  207 

This  presumption  that  the  service  is  gratuitously  rendered 
may  properly  be  invoked,  it  would  seem,  only  in  cases  of  sudden 
emergency  (see  ante,  §  202),  as  where  property  is  about  to  be 
destroyed  by  fire.  Accordingly,  there  are  a  number  of  cases  of 
non-emergency  services  in  which  a  recovery  has  been  allowed : 

Chase  v.  Corcoran,  1871,  106  Mass.  286 :  Action  for  money 
paid  in  moving  and  repairing  the  defendant's  boat  and  for 
compensation  for  care  and  trouble  in  keeping  and  repairing  the 
same.  The  plaintiff  found  the  boat  adrift  and  in  danger  of 
destruction,  towed  it  ashore,  and  after  making  efforts  to  find  the 
owner,  took  it  to  his  barn,  stowed  it  there  for  two  winters  and 
during  the  intervening  summer  made  certain  repairs  which  were 
necessary  for  its  preservation.  The  defendant  subsequently 
claimed  the  boat,  the  plaintiff  refused  to  deliver  it  unless  ex- 
penses of  caring  for  it  were  paid,  and  the  defendant  then  took 
the  boat  by  a  writ  of  replevin.  GRAY,  J.  (p.  288) :  "The 
claim  of  the  plaintiff  is  therefore  to  be  regulated  by  the  common 
law.  It  is  not  a  claim  for  salvage  for  saving  the  boat  when  adrift 
and  in  danger  on  tidewater ;  and  does  not  present  the  question 
whether  the  plaintiff  had  any  lien  upon  the  boat,  or  could  re- 
cover for  salvage  services  in  an  action  at  common  law.  His 
claim  is  for  the  reasonable  expenses  of  keeping  and  repairing 
the  boat  after  he  had  brought  it  to  shore ;  and  the  single  question 
is,  whether  a  promise  is  to  be  implied  by  law  from  the  owner  of 
a  boat,  upon  taking  it  from  a  person  who  has  found  it  adrift 
on  tidewater  and  brought  it  ashore,  to  pay  him  for  the  necessary 
expenses  of  preserving  the  boat  while  in  his  possession.  We 

Justice  Bo  WEN  said:  "The  general  principle  is,  beyond  all  question, 
that  work  and  labour  done  or  money  expended  by  one  man  to  preserve 
or  benefit  the  property  of  another  do  not,  according  to  English  law, 
create  any  lien  upon  the  property  saved  or  benefited,  nor,  even  if  stand- 
ing alone,  create  any  obligation  to  repay  the  expenditure.  Liabilities 
are  not  to  be  forced  upon  people  behind  their  backs  any  more  than  you 
can  confer  a  benefit  upon  a  man  against  his  will.  .  .  .  The  maritime  law, 
for  the  purposes  of  public  policy  and  for  the  advantage  of  trade,  imposes 
in  these  cases  a  liability  upon  the  thing  saved,  a  liability  which  is  a 
special  consequence  arising  out  of  the  character  of  mercantile  enter- 
prises, the  nature  of  sea  perils,  and  the  fact  that  the  thing  saved  was 
saved  under  great  stress  and  exceptional  circumstances.  No  similar 
doctrine  applies  to  things  lost  upon  land,  nor  to  anything  except 
ships  or  goods  in  peril  at  sea.'! 

327 


§  207]  DUTIFUL   INTERVENTION  [Part  II 

are  of  the  opinion  that  such  a  promise  is  to  be  implied.  The 
plaintiff,  as  the  finder  of  the  boat,  had  the  lawful  possession 
of  it,  and  the  right  to  do  what  was  necessary  for  its  preservation. 
Whatever  might  have  been  the  liability  of  the  owner  if  he  had 
chosen  to  let  the  finder  retain  the  boat,  by  taking  it  from  him 
he  made  himself  liable  to  pay  the  reasonable  expenses  incurred 

in  keeping  and  repairing  it."  * 

* 

1  Accord:  Reeder  v.  Anderson's  Admrs.,  1836,  4  Dana  (34  Ky.) 
193,  (ROBERTSON,  C.J. :  "The  only  question  to  be  considered  in  this 
case,  is  whether  the  law  will  imply  a  promise  by  the  owner  of  a  runaway 
slave,  to  pay  a  reasonable  compensation  to  a  stranger  for  a  voluntary 
apprehension  and  restitution  of  the  fugitive.  And,  though  such 
friendly  offices  are  frequently  those  only  of  good  neighborship,  which 
should  not  be  influenced  by  mercenary  motives  or  expectations  — 
nevertheless,  it  seems  to  us  that  there  is  an  implied  request  from  the 
owner,  to  all  other  persons  to  endeavor  to  secure  to  him  lost  property 
which  he  is  anxious  to  retrieve ;  and  that,  therefore,  there  should  be  an 
implied  undertaking  to  (at  least)  indemnify  any  person  who  shall,  by 
the  expenditure  of  time  or  money,  contribute  to  a  reclamation  of  the 
lost  property.")  And  see  Nicholson  v.  Chapman,  1793,  2  H.  Bl.  254, 
258,  (A  quantity  of  timber  belonging  to  the  plaintiff  was  placed  in  a 
dock  on  the  bank  of  a  navigable  river.  The  timber  was  accidentally 
loosened,  carried  by  the  tide  to  a  considerable  distance,  and  left  at  low 
water  upon  a  towing  path.  The  defendant  found  it  in  that  situation 
and  voluntarily  conveyed  it  to  a  place  of  safety  beyond  the  reach  of 
the  tide  at  high  water.  Nicholson  made  a  demand  upon  Chapman  for 
its  delivery,  but  this  the  latter  refused  to  do  unless  compensated  for  his 
services  in  saving  and  keeping  the  timber.  Nicholson  then  brought 
action  in  trover,  and  while  it  was  held  that  Chapman  had  no  lien  on  the 
timber  and  consequently  no  right  to  withhold  it  from  the  owner,  Lord 
Chief  Justice  EYRE  intimated  that  reasonable  compensation  for  Chap- 
man's services  might  be  recovered  by  him  in  a  suitable  action.  "A 
court  of  justice,"  he  declared,  "would  go  as  far  as  it  could  go,  towards 
enforcing  payment.");  Amory  v.  Flyn,  1813,  10  Johns.  (N.  Y.)  102; 
6  Am.  Dec.  316,  (in  which  it  is  said  that  a  finder  is  entitled  to  recover 
only  necessary  expenses  in  preserving  the  property).  But  see,  contra, 
Watts  ».  Ward,  1854,  1  Or.  86 ;  62  Am.  Dec.  299. 

By  §  1867  of  the  Civil  Code  of  California,  it  is  provided  that  "the 
finder  of  a  thing  is  entitled  to  compensation  for  all  expense  necessarily 
incurred  by  him  in  its  preservation,  and  for  any  other  service  necessarily 
performed  by  him  about  it,  and  to  a  reasonable  reward  for  keeping  it." 
See  to  the  same  effect :  Massachusetts  Revised  Laws,  1902,  ch.  94, 
s.  4;  Missouri  Annotated  Statutes,  1906,  §  8479;  North  Dakota 
Revised  Codes,  1905,  §  5481 ;  Washington,  Rem.  &  Bal.  Anno.  Codes, 
1909,  §  7143 ;  Wisconsin  Statutes,  1898,  §  1616.  One  who  takes  up 
estrays  is  also  entitled  to  compensation  by  statute.  See  Cummings  v. 
Ellis,  1909,  140  Mo.  App.  102;  119  S.  W.  512;  Illinois  Revised  Stat- 

328 


Chap.  XIV]  PRESERVATION   OF   PROPERTY  [§  207 

Beckwith  v.  Frisbie,  1860,  32  Vt.  559:  Action  to  recover 
money  paid  by  the  plaintiff,  owner  of  a  cargo  of  oats,  to  the 
defendants,  owners  of  a  canal  boat,  for  storage  of  the  cargo. 
In  the  course  of  carriage  the  boat  was  caught  by  unexpected 
cold  weather  and  frozen  in  the  canal,  where  she  was  obliged  to 
lie  all  winter.  It  was  necessary  for  the  safety  of  the  boat  and 
cargo  that  the  oats  should  be  removed  and  stored  for  the  winter. 
The  defendants  procured  this  to  be  done,  and  having  paid  for 
the  storage,  required  reimbursement  from  the  plaintiff,  who  in 
order  to  get  his  goods  complied  with  the  demand.  ALDIS,  J. 
(p.  568) :  "It  is  expense  bestowed  on  the  plaintiff's  property 
and  for  his  benefit ;  it  preserves  his  property,  but  it  does  not 
aid  the  defendant's  interest,  which  was  simply  to  transport  the 
cargo  to  New  York.  We  think  that  equity  between  these 
parties  requires  that  this  expense  should  be  borne  by  the  plain- 
tiff. And  if  he  was  so  liable  in  equity  he  could  not  shift  the 
burden  on  to  the  defendants  by  refusing  to  pay  what  it  was  his 
duty  to  pay.  The  law  raises  an  implied  promise  on  his  part 
to  pay  the  defendants  for  what  they  might  be  obliged  to  ex- 
pend in  preserving  his  property,  when  that  duty  was  thrown 
upon  them  by  their  having  his  property  in  their  care  as  car- 
riers, and  were  prevented  from  completing  their  contract  by 
an  act  of  Providence.  If  he  has  paid  it  he  cannot  recover  it 
back."  l 

utes,  1908,  ch.  50,  s.  7 ;  Massachusetts  Revised  Laws,  1902,  ch.  94, 
s.  7 ;  Minnesota  Revised  Laws,  1905,  §  2772 ;  Ohio,  Bates  Anno.  Stat- 
utes, 1908,  §  6633;  Wisconsin  Statutes.  1898,  §  1611. 

1  Accord:  Preston  v.  Neale,  1858,  12  Gray  (Mass.)  222,  224,  (Action 
by  a  landlord,  not  an  innkeeper,  for  storage  of  chattels  left  by  an  out- 
going tenant.  Held,  that  the  landlord  had  no  lien  on  the  goods,  but 
was  entitled  to  reasonable  compensation  for  storage.  Said  METCALF, 
J. :  "There  is  also  an  ancient  authority  on  this  point,  to  wit,  Doctor  and 
Student,  c.  51,  where  is  this  passage:  'Though  a  man  waive  the  pos- 
session of  his  goods  and  saith  he  forsaketh  them,  yet  by  the  law  of  the 
realm  the  property  remaineth  still  in  him,  and  he  may  seize  them  after 
when  he  will.  And  if  any  man  in  the  meantime  put  the  goods  in  safe- 
guard to  the  use  of  the  owner,  I  think  he  doth  lawfully,  and  that  he 
shall  be  allowed  for  his  reasonable  expenses  in  that  behalf,  as  he  shall 
be  of  goods  found ;  but  he  shall  have  no  property  in  them,  no  more 
than  in  goods  found.'");  Moline,  etc.,  Co.  v.  Neville,  1897,  52  Neb. 
574 ;  72  N.  W.  854,  (action  by  owner  of  building  for  storage  of  goods 
which  had  been  part  of  stock  of  lessee).  And  see  Great  Northern  R 
Co.  v .  Swaffield,  1874,  L.  R.  9  Exch.  132. 

329 


§  208]  DUTIFUL   INTERVENTION  [Part  II 


In  re  Bryant's  Estate,  1897,  180  Pa.  St.  192  ;  36  Atl.  738  : 
Claim  of  one  Lodge  for  services.  MITCHELL,  J.  (p.  195)  :  "It 
appears  that  for  several  years  before  the  death  of  Capt.  Bryant, 
Lodge  was  his  man  of  business  for  the  collection  of  rents  and 
the  management  of  his  real  estate,  as  well  as  his  confidential 
adviser  in  other  matters.  The  sudden  death  of  Capt.  Bryant 
without  known  heirs  left  Lodge  in  charge  and  quasi  possession 
as  an  agent  without  a  known  principal,  and  therefore  with 
at  least  a  moral  duty  to  look  after  the  property  for  the  real 
owner,  whoever  he  might  prove  to  be.  This  duty  the  orphans' 
court  found  that  he  had  performed  in  good  faith,  and  was 
entitled  to  be  compensated  for.  ...  As  a  result  of  further 
consideration  of  this  subordinate  part  of  the  case,  we  are  not 
satisfied  that  the  learned  court  below  committed  any  error  in 
holding  that  Lodge  had  rendered  services  to  the  estate  for 
which  he  was  entitled  to  be  compensated,  and  in  fixing  the 
amount."  l 

It  is  noticeable  that  in  practically  all  of  the  cases  in  which 
a  recovery  has  been  allowed,  the  plaintiff  was  either  a  finder 
of  the  property  preserved,  or  a  custodian  or  bailee.  This  sug- 
gests that  the  right  to  compensation  may  grow  out  of  a  special 
interest  in  the  property.  But,  upon  principle,  such  an  interest 
does  not  appear  to  be  essential. 

§  208.  (7)  Repairs  by  a  cotenant.  —  If  a  tenant  in  common  or 
joint  tenant  of  a  building  makes  repairs  or  alterations  without 
the  knowledge  or  against  the  wishes  of  his  cotenant,  the  latter 
is  obviously  under  no  contractual  obligation  to  contribute  to 
the  expense.  Moreover,  since  one  is  not  ordinarily  required 
by  law  to  preserve  his  property,  it  cannot  be  contended  that 
the  tenant  who  makes  the  repairs  is  in  the  position  of  one  who 
confers  a  benefit  upon  another  under  compulsion.  If  a  quasi 
contractual  obligation  to  contribute  is  to  be  recognized  at  all, 
it  must  be  upon  the  theory  that  the  interest  of  the  tenant  who 
makes  the  repairs  calls  for  such  an  intervention  in  his  co- 

1  C/.  Mathie  ».  Hancock,  1906,  78  Vt.  414  ;  63  Atl.  143,  in  which  one 
•who,  after  the  death  of  his  employer,  furnished  feed  for  and  exercised 
his  horses  until  they  were  taken  possession  of  by  the  administrator,  was 
not  allowed  to  recover. 

330 


Chap.  XIV]  REPAIRS   BY   A   COTENANT  [§  208 

tenant's  affairs  as  may  be  necessary  to  save  the  property  from 
destruction  or  decay. 

At  the  early  common  law,  a  tenant  in  common  or  joint 
tenant  of  a  house  or  mill,  who  regarded  certain  repairs  as 
necessary  for  the  preservation  of  the  property,  could  bring  his 
dissenting  cotenant  into  court  by  the  writ  de  reparatione 
faciendd  and  have  the  reasonableness  of  the  proposed  repairs 
determined,  and  the  obligation  of  the  cotenant  fixed.  Coke, 
in  his  commentary  on  Littleton,1  stated  the  doctrine  as  follows : 

"  If  two  tenants  in  common,  or  joint  tenants,  be  of  an  house 
or  mill,  and  it  fall  in  decay,  and  the  one  is  willing  to  repaire 
the  same,  and  the  other  will  not,  he  that  is  willing  shall  have 
a  writ  de  reparatione  faciendd,  and  the  writ  saith  ad  reparationem 
et  sustentationem  ejusdem  domus  teneantur,  whereby  it  appeareth 
that  owners  are  in  that  case  bound  pro  bono  publico  to  maintain 
houses  and  mills  which  are  for  habitation  and  use  of  men." : 

This  seems  to  have  been  the  only  method  by  which  a  co- 
tenant  could  be  compelled  to  pay  his  share  of  the  expense. 
To  make  the  repairs  first  and  then  sue  the  cotenant  for  con- 
tribution was  not  permitted. 

The  writ  de  reparatione  appears  to  have  been  rarely  used  — 
probably  because  in  case  of  controversy  between  cotenants 
partition  is  the  most  natural  and  satisfactory  remedy  —  and 
is  now  obsolete.3  It  has  been  suggested  in  several  cases  that 
if  a  cotenant  is  requested  to  join  in  making  repairs  and  refuses 

1  Coke  Lit.  200  b. 

2  And  see    Bowles's  Case,    1616,  11  Coke  79  b,  82  b;    Cooper  v. 
Brown,  1909,  143  la.  482 ;   122  N.  W.  144 ;   136  Am.  St.  Rep.  768 ; 
Kent,  "Commentaries,"  Vol.  4,  p.  370.     In  Leigh  v.  Dickeson,  1883, 12 
Q.  B.  D.  194,  197,  Baron  POLLOCK  said:   "It  is  curious  to  observe  that 
the  remedy  between  the  joint  tenants  is  spoken  of  as  if  it  was  one 
which  existed  rather  for  the  benefit  of  the  community  than  of  the  joint 
tenants."     A  statute  in  Wisconsin  makes  joint  owners  of  milldams,  etc., 
liable  for  the  expense  of  necessary  repairs.     Clark  v.  Plummer,  1872,  31 
Wis.  442. 

3  In  Ward  v.  Ward's  Heirs,  1895,  40  W.  Va.  611;    21  S.  E.  746; 
29  L.  R.  A.  449 ;  52  Am.  St.  Rep.  911,  BRAMMAR,  J.,  said :  "I  have  no 
doubt  this  old  common  law  writ,  though  disused,  might  yet  be  resorted 
to." 

331 


§  208]  DUTIFUL   INTERVENTION  [Part  II 

so  to  do,  that  "  an  action  for  the  money  expended  "  might  be 
used  in  its  place,1  but  it  has  been  held,  on  the  contrary,  that 
an  action  at  law  for  that  purpose  will  not  lie.2  In  a  suit  for 
partition,  however,  a  court  of  equity  will,  in  a  proper  case, 
give  its  relief  upon  condition  of  an  allowance  for  necessary  re- 
pairs and  improvements,3  and  in  a  Kentucky  case 4  it  was  held 
that,  without  partition,  one  half  the  cost  of  repairs  made  by 
one  tenant  to  which  the  other  refused  to  contribute  might  be 
made  a  lien  upon  the  income  from  the  portion  of  the  delinquent. 
The  remedy  by  writ  de  reparatione  did  not  extend  to  the 
case  of  repairs  by  the  owner  in  severalty  of  part  of  a  building. 

1  Leigh  v.  Dickeson,  1883,  12  Q.  B.  D.  194 ;  Cooper  v.  Brown,  1909, 
143  la.  482 ;    122  N.  W.  144 ;    Doane  v.  Badger,  1815,  12  Mass.  65 ; 
Stevens  v.  Thompson,  1845,  17  N.  H.  103 ;   Mumford  v.  Brown,  1826, 
6  Cow.  (N.  Y.)  475 ;  16  Am.  Dec.  440 ;  Dech's  Appeal,  1868,  57  Pa.  St. 
467,  472.     And  see   Haven  v.  Mehlgarten,  1857,  19  111.  91 ;   Beaty  v. 
Bordwell,  1879,  91  Pa.  St.  438.     In  Leigh  v.  Dickeson,  supra,  which  was 
an  action  for  use  and  occupation  by  one  tenant  in  common  against 
another,  with  a  counterclaim  for  money  expended  in  repairs,  Baron 
POLLOCK  said  (p.  196) :  "No  case  or  authority  was  cited  by  counsel  to 
shew  that  going  back  for  a  long  period  of  years  effect  has  ever  been 
given  by  the  Courts  to  a  claim  by  action  by  one  tenant  in  common 
against  another  for  money  which  had  been  expended  upon  the  repair 
of  their  common  property,  nor  have  I  been  able  to  find  any  such  case  or 
authority,  although  the  claim  deals  with  a  matter  of  common  occur- 
rence, and  the  question  must  often  have  arisen  if  the  defendant's  con- 
tention be  correct.     It  becomes  necessary,  therefore,  to  refer  to  the 
older  law,  and  to  see  upon  what  principle  any  claim  of  a  like  nature  has 
been  rested,  and  how  far,  if  at  all,  it  would  govern  a  case  like  the  pres- 
ent."    After  discussing  the  writ  de  raparatione  faciendd,  he  concluded 
that  the  principle  underlying  it  had  no  application  to  the  case  at  bar, 
because  the  repairs  for  which  contribution  was  claimed  were  not  such 
as  were  necessary  to  prevent  the  house  from  going  to  ruin. 

2  Calvert  v.  Aldrich,  1868,  99  Mass.  74 ;  96  Am.  Dec.  693.     And  see 
Merchants'  Bank  v.  Foster,  1900,  124  Ala.  696  ;  27  So.  513,  (party  wall). 

3  Swan  v.  Swan,  1819,  8  Price  518 ;  Drennen  v.  Walker,  1860,  21 
Ark.  539 ;  McDearman  v.  McClure,  1876,  31  Ark.  559  ;  Hall  v.  Piddock, 
1871,  21  N.  J.  Eq.  311 ;  Ford  v.  Knapp,  1886,  102  N.  Y.  135;  6  N.  E. 
283  ;  55  Am.  Rep.  782 ;  Cosgriff  v.  Foss,  1897,  152  N.  Y.  104 ;  46  N.  E. 
307 ;   36  L.  R.  A.  753 ;   57  Am.  St.  Rep.  500 ;   Ward  v.  Ward's  Heirs, 
1895,  40  W.  Va.  611 ;  21  S.  E.  746 ;  29  L.  R.  A.  449 ;  52  Am.  St.  Rep. 
911. 

4  Hotopp  v.  Morrison  Lodge,  1901,  110Ky.987;   23  Ky.  Law  Rep. 
418 ;   63  S.  W.  44. 

332 


Chap.  XIV]      PERFORMANCE   OF   CONTRACTUAL   DUTY  [§  209 

And  it  has  consequently  been  held  that  where  the  owner  of 
the  upper  part  of  a  house  makes  necessary  repairs  to  the  roof, 
he  cannot,  by  an  action  of  assumpsit,  enforce  contribution  from 
the  owner  of  another  part.1  It  has  been  intimated,  however, 
that  equity  might  afford  relief,2  and  the  case  of  Campbell  v. 
Mesier*  in  which  Chancellor  KENT  held  that  one  who  rebuilt 
a  decayed  party  wall  was  entitled  to  contribution  from  the 
owner  of  the  adjoining  house,  is  closely  analogous. 

§  209.  (8)  Performance  of  another's  contractual  duty.  — 
The  prompt  discharge  of  a  contractual  obligation  is  not  ordi- 
narily a  matter  of  grave  public  concern.  As  a  rule,  therefore 
(see  ante,  §  194),  the  default  of  a  contractor  will  not  warrant 
the  intervention  of  a  stranger  to  the  contract.4  But  if  one 
contracts  to  support  a  person  who  by  reason  of  age  or  dis- 
ability is  dependent  upon  the  performance  of  the  contract  for 
the  necessaries  of  life,  and  then  refuses  to  furnish  the  support, 
intervention  by  an  appropriate  person  (see  ante,  §  196),  at 
least  until  damages  for  the  breach  of  contract  can  be  collected, 
would  seem  to  be  dutiful.  It  was  accordingly  held,  in  a  New 
York  case,6  that  the  value  of  support  so  furnished  might  be 
recovered  from  the  contractor,  the  court  relying  chiefly  on  the 
analogy  to  the  case  of  necessaries  furnished  to  a  wife  or  infant 
child  for  whom  the  husband  or  father  improperly  neglects  or 
refuses  to  provide  (see  ante,  §  203).  In  a  Maine  case,6  on  the 
other  hand,  a  recovery  was  denied  upon  the  ground  that  a 
person  entitled  by  contract  to  support,  unlike  a  wife  or  child, 
"  may  in  his  own  name,  enforce  his  rights,  and  obtain  the 
means  of  fulfilling  his  own  contracts  with  others."  That  he 

1  Loring  v.  Bacon,  1808,  4  Mass.  575.     And  see   Cheeseborough  v. 
Green,  1834,  10  Conn.  318 ;  26  'Am.  Dec.  396 ;  Wiggin  v.  Wiggin,  1862, 
43  N.  H.  561 ;  80  Am.  Dec.  192. 

2  Cheeseborough  v.  Green,  1834,  10  Conn.  318 ;   26  Am.  Dec.  396. 

3  1820,  4  Johns.  Ch.  (N.  Y.)  334 ;  8  Am.  Dec.  570. 

*  See  Johnson  v.  Boston,  etc.,  R.  Co.,  1897,  69  Vt.  521 ;  38  Atl.  267. 

5  Forsyth  v.  Ganson,  1830,  5  Wend.  (N.  Y.)  558;  21  Am.  Dec.  241. 
And  see  Rundell  v.  Bentley,  1889,  53  Hun  272 ;  6  N.  Y.  Supp.  609. 

6  Moody  v.  Moody,  1837,  14  Me.  307,  309.     And  see   Matheny  v. 
Chester,  1911,  141  Ky.  790 ;  133  S.  W.  754 ;  Savage  v.  McCorkle,  1888, 
17  Or.  42  ;  21  Pac.  444. 

333 


§  210]  DUTIFUL   INTERVENTION  [Part  II 

may  enforce  his  own  rights  is  true,  but  the  enforcement  of 
rights  requires  more  or  less  time,  and  meanwhile  he  must  be 
provided  with  the  necessaries  of  life. 

§  210.  (9)  Performance  of  another's  statutory  duty  to  re- 
pair roads.  —  In  the  recent  and  interesting  English  case  of 
Macclesfield  Corporation  v.  Great  Central  Railway  Company,1  it 
was  held  that  the  district  highway  authorities  could  not  recover 
expenses  incurred  in  repairing  a  bridge  roadway  which  the 
defendant,  in  violation  of  its  statutory  duty,  refused  to  repair. 
Said  KENNEDY,  L.J.  : 

"If  it  could  have  been  shewn  that  the  plaintiffs  were  legally 
compellable  to  do  the  work,  I  should  say  that,  having  been  com- 
pelled to  do  something  which  the  railway  company  ought  to 
have  done,  the  plaintiffs  might  recover ;  but  the  authorities,  as 
Farwell,  L.J.,  has  pointed  out,  are  clear  to  shew  that  it  would 
be  a  sufficient  defence  in  a  case  of  this  kind,  were  proceedings 
taken  against  the  local  authority  for  non-repair  of  the  roadway 
passing  over  the  bridge,  to  shew  that  Parliament  by  this  pri- 
vate Act  in  a  section  which,  so  far  as  regards  the  portion  with 
which  we  are  concerned,  has  to  be  construed  for  the  public 
benefit,  not  for  the  benefit  merely  of  an  individual  or  a  set  of 
private  individuals,  has  ordered  that  the  repair  is  to  be  done  by 
the  company.  In  such  a  case  it  could  have  been  pleaded  as  a 
defence  to  proceedings  against  the  local  authority  that  the  burden 
had  been  thrown  upon  another  body,  and  therefore  the  common 
law  liability  had  been,  as  it  were,  extinguished  by  the  will  of 
Parliament.  Not  being  under  a  statutory  obligation  to  pay  for 
or  to  do  the  work,  this  local  authority  has  done  the  work  and 
incurred  expense  in  doing  it,  and  I  do  not  know  the  legal 
principle  upon  which  in  those  circumstances  they  can  throw  the 
burden  upon  some  one  else  who  ought  in  the  first  instance  to 
have  done  the  work,  and  who  therefore  is  in  a  position  to  say, 
'  You  who  seek  to  recover  this  payment  from  me  have  acted  as 
volunteers/ ' 

This  decision,  it  is  respectfully  submitted,  is  erroneous. 
All  of  the  elements  of  quasi  contractual  obligation  were  present 
(see  ante,  §  193).  The  defendant's  duty  was  one  the  prompt 

1  [1911]  2  K.  B.  528,  540 ;  104  L.  T.  R.  728,  736. 
334 


Chap.  XIV]   PERFORMANCE  OF  STATUTORY  DUTY       [§  210 

performance  of  which  was  a  matter  of  public  concern;  the 
plaintiffs  were  eminently  the  proper  persons  to  intervene; 
the  defendants  had  been  requested  to  perform  their  duty  and 
had  refused  so  to  do.  The  fact  that  the  plaintiffs  acted  vol- 
untarily, in  the  sense  that  there  was  neither  mistake  nor  com- 
pulsion, did  not  justify  the  denial  of  relief,  as  all  of  the  cases 
in  which  dutiful  intervention  has  been  held  to  raise  an  obliga- 
tion testify. 


335 


PART   III 

BENEFITS  CONFERRED  UNDER  CONSTRAINT 
CHAPTER    XV 

CONSTRAINT   OF  DURESS 

§  211.     In  general. 

§  212.     (I)  What  constitutes  duress. 

§  213.     (II)  Sundry  instances  of  obligation,   classified  according  to 

means  of  compulsion  employed : 

§  214.         (1)  Violence  or  imprisonment :  Duress  of  person. 
§  215.         (2)  Threat  of  legal  proceedings. 
§  216.         (3)  Seizure  or  detention  of  personal  property. 
§  217.         (4)  Assertion  of  fictitious  lien  on  real  property  or  refusal  to 

discharge  valid  lien. 
§  218.         (5)  Injury  to  business. 
§  219.         (6)  Oppressive  refusal  to  discharge  a  duty  : 

(a)  Illegal  fees  of  public  officers. 

§  220.  (6)  Illegal  charges  of  public  service  corporations. 

§  221.  Same  :  Necessity  of  protest. 

§  222.         (7)  Oppressive  refusal  to  loan  money  at  legal  rate  of  interest. 
§  223.  Same :  Right  to  recover  usury  :  Upon  principle. 

§  224.  Same :  Right  to  recover  from  assignee  of  usurer. 

§  225.  Same :   Right  to  recover  before  principal  and  legal  interest 

are  paid. 
§  226.  Same :  Right  of  debtor  to  have  usurious  interest  applied 

in  diminution  of  principal. 
§  227.  Same :  Recovery  of  usurious  interest  under  National  Bank 

Act. 

§211.  In  general. — As  a  matter  of  logical  analysis,  the 
obligation  to  restore  a  benefit  conferred  under  compulsion 
exercised  by  the  defendant  should  be  regarded,  not  as  a  pri- 
mary quasi  contractual  obligation,  but  as  a  secondary  obliga- 
tion resulting  from  the  breach  of  a  primary  obligation.  That 
is  to  say,  there  ought  to  be  recognized  a  universal  obligation 
not  to  exercise  duress  over  another  to  his  damage,  just  as  there 
is  not  to  mislead  another  to  his  damage  by  false  representations. 
For  in  both  cases  the  duty  is  essentially  the  same  —  to  refrain 

336 


Chap.  XV]  WHAT   CONSTITUTES   DURESS  [§  212 

from  injuring  another  by  wrongfully  creating  a  motive  for 
action.  If  such  were  the  law,  the  exercise  of  duress,  like  that  of 
fraud  (see  post,  §  270),  would  not  create  a  primary  obligation, 
but  would  violate  a  preexisting  primary  obligation  —  in  other 
words  would  not  give  rise  to  a  quasi  contract  but  would  con- 
stitute a  tort  —  and  the  resulting  right  of  the  injured  party 
to  restitution  as  well  as  his  right  to  damages,  would  be  second- 
ary or  remedial. 

As  a  matter  of  fact,  while  obtaining  goods  or  money  by 
the  exercise  of  actual  force  against  the  owner  has  been  held 
a  trespass,  the  accomplishment  of  the  same  purpose  by  threat 
or  menace  or  by  any  milder  form  of  compulsion  has  not  been 
recognized  as  a  tort.  In  the  light  of  the  law  of  deceit,  false 
imprisonment  by  threats  of  force,  and  the  procurement,  by 
threats  of  force,  of  a  refusal  to  contract,  the  omission  is  re- 
markable. It  is  in  large  measure  due,  probably,  to  the  notion 
that  the  fact  of  consent  (though  improperly  obtained)  effects 
a  transfer  of  title  and  thus  absolves  the  transferee  from  the 
charge  of  violating  a  property  right. 

Although  failing  to  recognize  the  obtainment  of  goods  or 
money  by  duress  (short  of  actual  force)  as  a  tort,  the  courts 
were  of  course  not  blind  to  the  fact  that  the  retention,  without 
compensation,  of  goods  or  money  so  obtained  may  be  unjust. 
In  the  course  of  time,  therefore,  the  convenient  remedy  of  assump- 
sit  was  granted.  And  since  the  obligation  to  make  restitution 
is  obviously  not  contractual  in  character,  but  rests  solely  upon 
the  injustice  (which  must  appear  *)  of  permitting  the  retention  of 
the  benefit  so  obtained,  it  is  properly  treated  as  quasi  contractual. 

§  212.  (I)  What  constitutes  duress.  —  The  legal  conception 
of  duress,  originally  so  narrow  as  to  apply  only  to  cases  of 
imprisonment  or  serious  violence  to  the  person,  or  threats  of 
such  imprisonment  or  violence,2  has  gradually  expanded  under 
the  influence  of  equity,  until  it  is  now  commonly  said  to  consist 
of  any  actual  or  threatened  unlawful  exercise  of  power  possessed, 
or  believed  to  be  possessed,  by  one  party  over  the  person  or 

1  Koenig  v.  People's  Gas,  etc.,  Co.,  1910,  153  111.  App.  432. 
*  Skeate  v.  Beale,  1841,  11  Ad.  &  El.  983. 

337 


§  213]  CONSTRAINT  OF  DURESS  [Part  III 

property  of  another,  from  which  the  latter  has  no  other  means 
of  immediate  relief  than  the  performing  of  the  required  act.1 
Indeed  it  is  becoming  increasingly  difficult,  because  of  the  adop- 
tion of  equitable  doctrines  in  common  law  courts  and  the  con- 
fusion, in  many  jurisdictions,  of  legal  and  equitable  procedure, 
to  distinguish  duress  from  what  in  equity  is  called  undue  in- 
fluence.2 But  it  is  unnecessary  here  to  attempt  a  very  precise 
definition  of  the  bounds  of  either.  It  need  only  be  said  that  upon 
principle  any  species  of  compulsion  that  would  make  a  contract 
voidable,  either  at  law  or  in  equity,  should  be  enough  to  support 
an  action  to  recover  the  value  of  a  benefit  conferred  thereunder. 
§  213.  (II)  Sundry  instances  of  obligation  classified  according 
to  means  of  compulsion  employed.  —  The  cases  in  which  resti- 
tution is  most  commonly  sought  may  be  classified,  according 
to  the  means  of  compulsion  employed,  as  follows : 

(1)  Violence  to  the  person  or  imprisonment  —  commonly 
called  duress  of  person. 

(2)  Threat  of  legal  proceedings. 

(3)  Seizure  or  detention  of  personal  property  —  commonly 
called  duress  of  goods. 

(4)  Assertion  of  fictitious  lien  on  real  property  or  refusal  to 
discharge  valid  lien. 

(5)  Injury  to  business. 

(6)  Oppressive  refusal  to  discharge  a  duty. 

(7)  Oppressive    refusal  to  loan  money  at  a  legal  rate    of 
interest. 

They  will  be  considered  in  the  above  order. 

§  214.  (1)  Violence  or  imprisonment:  Duress  of  person. — It 
is  familiar  law  that  money  paid  under  constraint  of  actual  or 
threatened  physical  harm,  either  to  the  plaintiff  himself  or  to  a 
member  of  his  family,  may  be  recovered.3  The  same  is  true  of 

1  See  Harriman,  "Contracts,"  §  445  and  cases  cited;    Joannin  v. 
Ogilyie,  1892,  49  Minn.  564 ;  52  N.  W.  217 ;  16  L.  R.  A.  376 ;  32  Am. 
St.  Rep.  581. 

2  See   Galusha  v.  Sherman,  1900,  105  Wis.  263 ;   81  N.  W.  495 ;   47 
L.  R.  A.  417. 

3  Harmon  v.  Harmon,  1873,  61  Me.  227  ;  14  Am.  Rep.  556. 

338 


Chap.  XV]          THREAT   OF   LEGAL   PROCEEDINGS  [§215 

money  paid  under  constraint  of  actual  or  threatened  unlawful  im- 
prisonment.1 And,  notwithstanding  frequent  statements  to  the 
effect  that  the  imprisonment  must  be  unlawful,2  it  seems  the 
better  rule  that  to  take  advantage  of  a  lawful  imprisonment 
or  of  threats  of  lawful  imprisonment  for  the  purpose  of  further- 
ing one's  private  ends  is  duress.3  Money  so  extorted  may  there- 
fore be  recovered.4 

§  215.  (2)  Threat  of  legal  proceedings.  —  The  commencement 
of  an  action,  as  will  be  seen  in  the  next  chapter  (post,  §  228), 
does  not  constitute  duress.  A  fortiori,  a  threat  of  civil  process 
is  not  duress  and  money  paid  or  other  benefits  conferred  because 
of  such  a  threat  may  not  be  recovered.6 

1  Cadaval  v.  Collins,  1836,  4  Ad.  &  E.  858 ;  Foss  v.  Whitehouse,  1901, 
94  Me.  491;    48  Atl.  109;    Cribbs  v.  Sowle,  1891,  87  Mich.  340;    49 
N.  W.  587 ;  24  Am.  St.  Rep.  166 ;  Fossett  v.  Wilson,  1881,  59  Miss.  1 ; 
Adams  v.  Irving  Nat.  Bank,  1889, 116  N.  Y.  606 ;  23  N.  E.  7  ;  6  L.  R.  A. 
491 ;  15  Am.  St.  Rep.  447 ;  Landa  v.  Obert,  1890,  78  Tex.  33 ;  14  S.  W. 
297. 

2  See  Plant  v.  Gunn,  1874,  2  Woods  (U.  S.  C.  C.)  372 ;   Fed.  Cas., 
No.  11,205;  Hatter  v.  Greenlee,  1834,  1  Port.  (Ala.)  222;   26  Am.  Dee. 
370;   Bailey  v.  Devine,  1905,  123  Ga.  653;  51  S.  E.  603;   107  Am.  St. 
Rep.  153 ;  McCormick,  etc.,  Co.  v.  Miller,  1898,  54  Neb.  644 ;  74  N.  W. 
1061 ;  Dunham  v.  Griswold,  1885,  100  N.  Y.  224 ;  3  N.  E.  76. 

3  Williams  v.  Bayley,  1866,  L.  R.  1  H.  L.  200 ;    Hartford  Fire  Ins. 
Co.  v.  Kirkpatrick,  1896,  111  Ala.  456;  20  So.  651 ;  Morrill  v.  Nightin- 
gale, 1892,  93  Cal.  452 ;  28  Pac.  1068 ;  27  Am.  St.  Rep.  207  ;  Burton  v. 
McMillan,  1907,  52  Fla.  469;  42  So.  849;  8  L.  R.  A.  (N.  S.)  990;   120 
Am.  St.  Rep.  220;    Morse  v.  Woodworth,  1892,  155  Mass.  233;    27 
N.  E.  1010;  29  N.  E.  525;  Hensinger  v.  Dyer,  1898,  147  Mo.  219;  48 
S.  W.  912 ;   Richardson  v.  Duncan,  1826,  3  N.  H.  508 ;   Ball  v.  Ward, 
1909,  76  N.  J.  Eq.  8 ;   74  Atl.  158 ;   Adams  v.  Irving  Nat.  Bank,  1889, 
116  N.  Y.  606 ;  23  N.  E.  7 ;  6  L.  R.  A.  491 ;  15  Am.  St.  Rep.  447 ;  Phelps 
&  Johnsons  Zuschlag,  1870-71,34  Tex.  371 ;  Gorringe  v.  Reed,  1901, 
23  Utah  120 ;  63  Pac.  902  ;  90  Am.  St.  Rep.  692. 

4  Morse  v.  Woodworth,  1892,  155  Mass.  233;   27  N.  E.  1010;   29 
N.  E.  525;  Richardson?;.  Duncan,  1826,  3 N.  H.  508.     And  see  Heck- 
man  v.  Swartz,  1885,  64  Wis.  48 ;  24  N.  W.  473. 

5  Vick  v.  Shinn,  1887,  49  Ark.  70 ;   4  S.  W.  60 ;  4  Am.  St.  Rep.  26, 
(threat  to  take  possession  of  property  under  a  mortgage  and  sell  the 
same) ;  Holt  v.  Thomas,  1894, 105  Cal.  273  ;  38  Pac.  891,  (threat  of  suit) ; 
Paulson  v.  Barger,  1906,  132  la.  547;   109  N.  W.  1081,  (threat  to  fore- 
close landlord's  lien) ;   Parker  v.  Lancaster,  1892,  84  Me.  512 ;   24  Atl. 
952,  (threat  of  suit) ;  Emmons  v.  Scudder,  1874,  115  Mass.  367,  (threat 
of  ejectment) ;  Weber  v.  Kirkendall,  1895,  44  Neb.  766 ;  63  N.  W.  35, 

339 


§  216]  CONSTRAINT  OF  DURESS  [Part  III 

While  a  threat  of  imprisonment  may  constitute  duress  (ante, 
§  214),  a  threat  of  criminal  prosecution,  when  no  warrant  has 
been  issued  and  there  is  no  immediate  danger  of  arrest,  is  not 
enough  to  make  a  payment  obtained  thereby  recoverable.1  In 
a  series  of  English  cases,  however,  it  has  been  held  that  if  the 
sanitary  authorities  of  a  district,  having  the  power  to  impose 
penalties  by  summary  proceedings,  notify  a  person  to  abate 
a  nuisance  which,  under  the  law,  the  authorities  themselves 
and  not  the.  person  notified  ought  to  abate,  and  the  person  so 
notified  abates  the  nuisance  in  pursuance  of  the  notice,  he  may 
recover  the  cost  of  the  work  done  as  money  paid  under  com- 
pulsion.2 The  analogy  to  cases  of  taxes  and  assessments  col- 
lectible by  summary  process  is  obvious  (post,  §  237  et  seq.}. 

§  216.  (3)  Seizure  or  detention  of  personal  property.  —  Al- 
though there  is  a  lingering  doubt  as  to  whether  the  wrongful 
seizure  or  detention  of  personal  property  should  be  regarded  as 
sufficiently  compulsive  to  make  a  contract  secured  thereby 
voidable  at  law,3  it  has  been  held  from  an  early  day  that  money 

(threat  of  attachment) ;  Evans  v.  Gale,  1846,  18  N.  H.  397,  (threat  of 
suit) ;  Peebles  ».  Pittsburg,  1882,  101  Pa.  St.  304 ;  47  Am.  Rep.  714, 
(threat  of  collection  by  process  of  law) ;  Flack  v.  Nat.  Bank  of  Commerce. 
1892,  8  Utah  193  ;  30  Pac.  746 ;  17  L.  R.  A.  583,  (threat  of  attachment). 
And  see  Mayor,  etc.,  of  Baltimore  v.  Lefferman,  1846,  4  Gill  (Md.), 
425 ;  45  Am.  Dec.  145 ;  C.  &  J.  Michel  Brewing  Co.  v.  State,  1905,  19 
S.  D.  302 ;  103  N.  W.  40 ;  70  L.  R.  A.  911. 

1  Loan,  etc.,  Assn.  v.  Holland,  1895,  63  111.  App.  58,  66 ;    Hines  v. 
Board  of  Comm'rs,  1883,  93  Ind.  266,  270 ;   Harmon  v.  Harmon,  1873, 
61  Me.  227  ;  14  Am.  Rep.  556 ;  Hilborn  v.  Bucknam,  1886,  78  Me.  482  ; 
7  Atl.  272 ;   57  Am.  Rep.  816 ;   Betts  v.  Village  of   Reading,  1892,  93 
Mich.  77;  52  N.  W.  940. 

2  Andrew  v.  St.  Olave's  Board  of  Works,  [1898]  1  Q.  B.  775  ;  North  v. 
Walthamstow  Urban  Council,  1898,  67  L.  J.,  Q.  B.  972 ;    Haedicke  t;. 
Friern  Barnet  Urban  Council,  [1904]  2  K.  B.807.     C/.  Mayor,  etc.,  of 
Baltimore  v.  Lefferman,  1846,  4  Gill  (Md.)  425 ;  45  Am.  Dec.  145. 

3  That  the  contract  is  voidable :  Spaids  v.  Barrett,  1870,  57  111.  289 ; 
11  Am.  Rep.  10,  (perishable  goods  detained) ;  Bennett  v.  Ford,  1874,  47 
Ind.  264,  (duress  of  person  and  goods) ;  Wilkerson  v.  Hood,  1896, 65  Mo. 
App.  491,  (note  given  to  secure  release  of  mules) ;   Foshay  v.  Ferguson, 
1843,  5  Hill  (N.  Y.)  154,   (threat  to  destroy) ;    Collins  v.  Westbury, 
1799,  2  Bay  (S.  C.)  211 ;   1  Am.  Dec.  643,  (seizure  of  slaves  at  distance 
from  home) ;   Oliphant  v.  Markham,  1891,  79  Tex.  543 ;   15  S.  W.  569 ; 
23  Am.  St.  Rep.  363,  (note  given  to  secure  possession  of  evidences  of 

340 


Chap.  XV]       SEIZURE  OF  PERSONAL  PROPERTY  [§  216 

paid  to  prevent  such  seizure  or  detention  or  to  release  property 
so  seized  or  detained  may  be  recovered.1  This  is  upon  the  theory 
that  the  immediate  possession  and  enjoyment  of  property  by 
its  owner  may  be  a  matter  of  such  importance  to  him  that  to 
deprive  him  of  it,  or  to  threaten  to  deprive  him  of  it,  for  the 
purpose  of  extorting  money  from  him  is  a  species  of  com- 
pulsion : 

Astley  v.  Reynolds,  1731,  2  Strange  916:  Action  to  recover 
money  paid  in  excess  of  legal  interest  to  redeem  plate  pawned 
to  the  defendant.  The  plaintiff  at  first  refused  to  pay  the 
amount  demanded  by  the  defendant,  but  several  months  later, 
the  defendant  still  refusing  to  give  up  the  goods  unless  the 
excessive  amount  was  paid,  the  plaintiff  paid  and  obtained 
his  goods.  Per  Curiam  (p.  916):  "We  think  also,  that  this 
is  a  payment  by  compulsion;  the  plaintiff  might  have  such 

debt).  Contra:  Skeate  v.  Beal,  1841,  11  Ad.  &  El.  983,  (excessive  dis- 
tress) ;  Hazelrigg  v.  Donaldson,  1859,  2  Mete.  (59  Ky.)  445,  (wrongful 
attachment) ;  Bingham  v.  Sessions,  1846,  6  Smed.  &  M.  (14  Miss.)  13, 
(fraudulent  execution) ;  Williams  v.  Phelps,  1862,  16  Wis.  80,  (unless 
"some  peculiar  and  pressing  necessity"). 

1  Astley  v.  Reynolds,  1731,  2  Strange  915,  (payment  to  redeem 
pawned  plate) ;  Irving  v.  Wilson,  1791,  4  Term  R.  485,  (payment  to 
revenue  officer) ;  Ashmole  v.  Wainwright,  1842,  2  Q.  B.  837 ;  2  Gale 
&  Dav.  217,  (payment  to  carrier) ;  Cobb  v.  Charter,  1865,  32  Conn. 
359 ;  87  Am.  Dec.  178,  (mechanic's  chest  of  tools) ;  DuVall  v.  Norris, 
1904,  119  Ga.  947;  47  S.  E.  212,  (money  paid  police  officer  to  secure 
return  of  stolen  ring) ;  Fenwick  Snipping  Co.  v.  Clarke  Bros.,  1909, 
133  Ga.  43 ;  65  S.  E.  140,  (payment  to  prevent  seizure  of  baggage) ; 
Lafayette,  etc.,  R.  Co.  v.  Pattison,  1872,  41  Ind.  312,  (payment  to  car- 
rier) ;  Chase  v.  Dwinal,  1830,  7  Greenl.  (Me.)  134 ;  20  Am.  Dec.  352, 
(illegal  boomage) ;  Whitlock  Mach.  Co.  v.  Holway,  1899,  92  Me.  414 ; 
42  Atl.  799,  (illegal  claim  for  storage) ;  Chandler  v.  Sanger,  1874,  114 
Mass.  364 ;  19  Am.  Rep.  367,  (oppressive  attachment) ;  Fargusson  v. 
Winslow,  1885,  34  Minn.  384 ;  25  N.  W.  942,  (illegal  lien) ;  Quinnett 
i>.  Washington,  1846,  10  Mo.  53,  (wrongful  distress) ;  Baldwin  v.  Liver- 
pool, etc.,  S.  S.  Co.,  1878,  74  N.  Y.  125 ;  30  Am.  Rep.  277,  (payment 
to  carrier) ;  Clancy  v.  Dutton,  1908,  129  App.  Div.  23 ;  113  N.  Y. 
Supp.  124,  (payment  to  carrier) ;  Cowley  v.  Fabien,  1912,  N.  Y. 

;  97  N.  E.  458;  Marsh  v.  Port  Harbour  Co.,  1841,  6  U.  C.  Q.  B. 
(O.  S.)  100,  (excessive  toll) ;  Alston  v.  Durant,  1847,  2  Strob.  L.  (S.  C.) 
257  ;  49  Am.  Dec.  596,  (excessive  fees  by  sheriff) ;  Buford  v.  Lonergan, 
1889,  6  Utah  301 ;  22  Pac.  164 ;  aff.  Lonergan  v.  Buford,  1893, 148  U.  S. 
581 ;  13  S.  Ct.  684,  (oppressive  refusal  to  deliver  cattle  under  contract). 

341 


§  216]  CONSTRAINT  OF  DURESS  [Part  III 

an  immediate  want  of  his  goods,  that  an  action  of  trover 
would  not  do  his  business :  where  the  rule  volenti  non  fit  in- 
juria  is  applied,  it  must  be  where  the  party  had  his  freedom 
of  exercising  his  will,  which  this  man  had  not ;  we  must  take  it 
he  paid  the  money  relying  on  his  legal  remedy  to  get  it  back 
again." 

Cobb  v.  Charter,  1865,  32  Conn.  358;  87  Am.  Dec.  178: 
McCuRDY,  J.  (p.  366) :  "The  plaintiff  was  a  mechanic.  His 
chest  of  tools,  which  are  held  by  statute  sacred  even  from  the 
touch  of  a  creditor,  were  seized  by  the  defendant.  He  refused 
to  deliver  them  to  the  owner  on  demand  except  upon  his  paying, 
without  the  slightest  obligation,  the  debt  of  another  person. 
The  plaintiff  was  thus  deprived  of  the  means  of  his  support. 
Thereupon  he  left  the  money  with  Stratton  to  be  paid  to  the 
defendant  when  the  chest  should  be  sent.  Stratton  so  informed 
the  defendant,  who  at  once  sent  the  chest  and  then  received 
the  money.  In  view  of  such  extortion,  oppression  and  taking 
an  undue  advantage  of  the  plaintiff's  situation,  it  seems  some- 
what bold  in  the  defendant  to  come  into  a  court  of  justice  and 
assert  that  the  payment  was  voluntary." 

Qualifications  of  the  rule  have  occasionally  been  made. 
For  example,  it  has  been  held  that  money  paid  to  obtain  the 
release  of  goods  distrained  cannot  be  recovered  if  the  goods 
might  have  been  replevied  by  the  plaintiff.1  Again,  it  has  been 
suggested  that  the  retention  of  the  goods  by  the  defendant 
must  appear  to  be  "  fraught  with  great  immediate  hardship 
or  irreparable  injury."  :  But  in  most  of  the  modern  cases  no 

1  Lindon  v.  Hooper,  1776, 1  Cowp.  414,  (wrongful  distress) ;  Knibbs  v. 
Hall,  1794,  1  Esp.  84,  (wrongful  distress) ;    Colwell  v.  Peden,  1834,  3 
Watts  (Pa.)  327,  (wrongful  distress).     And  see  Chase  v.  Dwinal,  1830, 
7  Greenl.  (Me.)  134;  20  Am.  Dec.  352,  (illegal  boomage) ;   Harmony  v. 
Bingham,  1854,  12  N.  Y.  99 ;    62  Am.  Dec.  142,  (carrier) ;    Peebles  v. 
City  of  Pittsburg,  1882,  101  Pa.  St.  304;   47  Am.  Rep.  714,  (uncon- 
stitutional assessment).     But  see,  contra,  Green  v.  Duckett,  1883,  11 
Q.  B.  D.  275,  (wrongful  distress) ;    Quinnett  v.  Washington,  1846,  10 
Mo.  53,  (wrongful  distress). 

2  See  Cobb  v.  Charter,  1865,  32  Conn.  358,  365 ;  87  Am.  Dec.  178 ; 
Fargusson  v.  Winslow,  1885,  34  Minn.  384,  386;   25  N.  W.  942,  ("cir- 
cumstances of  hardship  or  serious  inconvenience") ;  Joannin  v.  Ogilvie, 
1892,  49  Minn.  564,  567 ;  52  N.  W.  217 ;  16  L.  R.  A.  376;  32  Am.  St. 
Rep.  581,  ("serious  loss  or  great  inconvenience"). 

342 


Chap.  XV]       SEIZURE  OF  PERSONAL  PROPERTY  [§  216 

limitation  whatever  is  recognized.  The  doctrine  has  been 
applied  to  the  unlawful  seizure  or  detention  not  only  of  chattels, 
but  of  bonds,  deeds,  insurance  policies,  and  negotiable  instru- 
ments.1 

Analogously,  it  was  held  in  an  early  New  York  case,2  that  the 
wrongful  refusal  by  a  corporation  to  transfer  certain  shares 
of  stock  on  its  books  unless  the  buyer  of  the  shares  paid  a  debt 
from  the  seller  to  the  corporation,  was  such  duress  as  entitled 
the  buyer,  who  yielded  to  the  demand  in  order  to  secure  the 
transfer  of  his  stock,  to  recover  the  amount  paid.  "  The  equi- 
table extension  of  this  kind  of  action,"  said  the  court,  "  has  of 
late  been  so  liberal,  that  it  will  lie  to  recover  money  obtained 
from  any  one,  by  extortion,  imposition,  oppression,  or  taking 
an  undue  advantage  of  his  situation.  In  the  present  case,  there 
was,  at  least,  an  undue  advantage  taken  of  the  plaintiff's  situa- 
tion." In  a  comparatively  recent  Pennsylvania  case,3  on  the 
other  hand,  the  court  declined  to  extend  the  doctrine  to  the 
refusal  by  a  corporation  to  allot  a  certain  number  of  shares  of 
a  new  issue  to  a  stockholder  who  had  the  right,  by  law,  to  sub- 
scribe for  them  at  par,  unless  he  paid  an  additional  sum  "  for 
the  privilege  of  buying."  Said  Chief  Justice  PAXSON  :  "  It  is  not 
pretended  that  there  was  a  duress  of  person,  nor  was  there  any- 
thing to  show  duress  of  goods.  There  was  nothing  but  the 

1  Shaw  v.  Woodcock,  1827,  7  Barn.  &  Cress.  73,  (policies) ;   Close  v. 
Phipps,  1844,  7  Man.  &  G.  586,  (deeds) ;   Wakefield  v.  Newbon,  1844, 
6  Q.  B.  276,  (deeds) ;  Gates  v.  Hudson,  1851,  6  Exch.  346,  (deeds) :  Pem- 
berton  v.  Williams,  1877,  87  111.  15,  (deed) ;  McCabe  v.  Shaver,  1888,  69 
Mich.  25  ;  36  N.  W.  800,  (draft) ;  Bates  v.  N.  Y.  Ins.  Co.,  1802, 3  Johns. 
Cas.  (N.  Y.)  238,  (money  paid  to  secure  transfer  of  stock  on  company's 
books) ;  Scholey  v.  Mumford,  1875,  60  N.  Y.  498,  (bonds ;  case  came  be- 
fore Court  of  Appeals  again  in  72  N.  Y.  578  and  was  decided  on  slightly 
different  grounds) ;    Gould  v.  Farmers'  Loan,  etc.,  Co.,  1880,  23  Hun 
(N.  Y.  Sup.  Ct.)  322,  (stocks  and  bonds) ;   Motz  v.  Mitchell,  1879,  91 
Pa.  St.  114,  (deed);   Lowenstein  v.  Bache,  1910,  41  Pa.  Super.  Ct.  552, 
(securities) ;  Lovejoy  v.  Lee,  1862,  35  Vt.  430,  (bank  bills). 

2  Bates  v.  N.  Y.  Ins.  Co.,  1802,  3  Johns.  Cas.  (N.  Y.)  238,  239. 

3  De  la  Cuesta  v.  Insurance  Co.,  1890,  136  Pa.  St.  62,  82 ;  20  Atl. 
505 ;  9  L.  R.  A.  631.     See,  in  appendix  to  136  Pa.,  the  opinion  of  HARE, 
P.J.,  of  the  court  of  Common   Pleas,  in  Dawson   v.   Ins.   Co.,  which 
was  argued  in  the  Supreme  Court  with  De  la  Cuesta  v.  Ins.  Co. 

343 


§  217]  CONSTRAINT  OF  DURESS  [Part  III 

denial  of  a  right,  and  a  declared  intention  not  to  recognize  a  right 
is  not  duress." 

These  two  cases,  though  strongly  resembling  each  other, 
seem  fairly  distinguishable.  In  the  former,  the  defendant, 
by  refusing  to  transfer  the  shares  on  its  books,  practically 
withheld  from  the  plaintiff  specific  stock  which  he  had  pur- 
chased from  a  third  person  and  of  which  he  was  already  the 
equitable  owner ; 1  in  the  latter,  the  defendant  withheld  nothing 
that  belonged  in  any  sense  to  the  plaintiff  but  simply  refused 
to  perform  for  his  benefit  a  duty  imposed  upon  it  by  law.  In 
a  word,  it  is  the  difference  between  a  detention  of  property  and 
a  refusal  to  perform  an  obligation.  Both  cases,  however,  lie 
close  to  the  frontier  of  duress,  for  -under  some  circumstances 
a  mere  refusal  to  perform  an  obligation  has  been  held  suffi- 
ciently coercive  to  raise  an  obligation  to  repay  money  extorted 
thereby  (see  post,  §§  219,  220). 

§  217.  (4)  Assertion  of  fictitious  lien  on  real  property  or 
refusal  to  discharge  valid  lien. —  Upon  the  same  principle  as 
governs  cases  of  the  seizure  or  detention  of  personal  prop- 
erty (ante,  §  216),  money  extorted  by  the  assertion  of  a  ficti- 
tious or  invalid  lien  upon  real  property  or  by  a  wrongful  refusal 
to  discharge  a  valid  lien  has  been  held  recoverable.2  In  this 

1  See  Pemberton  v.  Williams,  1877,  87  111.  15.     In  this  case  the  defend- 
ant had  sold  land  to  the  plaintiff's  assignor  and  had  given  him  a  title 
bond.     After  several  payments  had  been  made  upon  the  purchase  price 
the  plaintiff  contracted  to  sell  the  land  to  another  who  demanded  to 
see  the  deed  from  the  defendant.     In  order  to  get  a  deed  the  plaintiff 
was  required  by  the  defendant  to  pay  more  than  was  due.     It  was 
held  in  an  action  to  recover  the  excess  that  the  question  whether  or  not 
the  money  was  paid  under  duress  should  have  been  left  to  the  jury. 

2  Fraser  v.  Pendlebury,  1861,  31  L.  J.  C.  PI.  1,  (refusal  to  assign  mort- 
gage unless  improper  demand  for  costs  satisfied) ;   Rowland  v.  Watson, 
1906,  4  Cal.  App.  476 ;  88  Pac.  495,  (refusal  to  release  lien  unless  exces- 
sive demand  paid) ;  Joannin  v .  Ogilvie,  1892,  49  Minn.  564 ;  52  N.  W. 
217;    16  L.  R.  A.  376;   32  Am.  St.  Rep.  581,  (filing  of  mechanic's  lien 
based  upon  an  unfounded  claim) ;  Fout  v.  Giraldin,  1895,  64  Mo.  App. 
165,  (refusal  to  cancel  mortgage  unless  illegal  demand  satisfied) ;  Wells  v. 
Adams,  1901,  88  Mo.  App.  215,  (refusal  to  cancel  mortgage  unless  bonus 
paid) ;  First  Nat.  Bank  v.  Sargeant,  1902,  65  Neb.  594 ;  91  N.  W.  595  ; 
59  L.  R.  A.  296,  (excessive  amount  paid  to  secure  release  of  mortgage) ; 
Kilpatrick  v.  Germania  Life  Ins.  Co.,  1905,  183  N.  Y.  163 ;   75  N.  E. 

344 


Chap.  XV]      REFUSAL   TO   DISCHARGE   VALID   LIEN  [§  217 

case,  however,  since  there  is  ordinarily  no  interference  with 
the  owner's  possession  and  enjoyment  of  the  property,  he  should 
be  required  to  prove,  either  that  the  lien  constituted  a  cloud 
on  title,  or  that  special  circumstances  —  such  as  the  necessity 
of  borrowing  money  on  the  security  of  the  land  —  made  the 
immediate  lifting  of  the  lien,  whether  a  technical  cloud  on  title 
or  not,  a  matter  of  grave  importance.1 

Whether  money  paid  to  prevent  the  wrongful  foreclosure 
of  a  mortgage  may  be  recovered  depends,  in  large  measure, 
upon  the  nature  of  the  foreclosure  proceedings.  If  it  is  a 
judicial  foreclosure  that  is  instituted  or  threatened,  and  the 
owner  will  therefore  have  his  day  in  court  before  his  property 

1124  ;  111  Am.  St.  Rep.  722,  (excessive  amount  paid  to  secure  release  of 
mortgage).  Contra:  Savannah  Savings  Bank  v.  Logan,  1896,  99  Ga. 
291 ;  25  S.  E.  692,  (payment  of  installments  not  yet  due  to  secure  release 
of  mortgage).  And  see  Hipp  v.  Crenshaw,  1884,  64  la.  404;  20  N.  W. 
492,  (payment  of  judgment  appealed  from  in  order  to  borrow  money  on 
land  upon  which  judgment  was  lien ;  held  voluntary) ;  Williamson  v. 
Cole,  1875,  26  Oh.  St.  207,  (usurious  interest  paid  to  secure  a  reconvey- 
ance ;  held  voluntary). 

1  In  Joannin  v.  Ogilvie,  1892,  49  Minn.  564,  570 ;  52  N.  W.  217 ;  16 
L.  R.  A.  376;  32  Am.  St.  Rep.  581,  the  plaintiff  paid  off  an  invalid 
mechanic's  lien  in  order  that  he  might  consummate  a  loan  upon  the 
property  and  thereby  discharge  pressing  debts.  Said  MITCHELL,  J. : 
"But  while  the  filing  of  the  lien  did  not  interfere  with  the  defendant's 
possession  of  the  land,  yet  it  as  effectually  deprived  him  of  the  use  of  it 
for  the  purpose  for  which  he  needed  it  as  would  withholding  the  pos- 
session of  chattel  property."  See  also  Wells  v.  Adams,  1901,  88  Mo. 
App.  215,  225,  where  the  court  said:  "The  case  here  is  that  the  de- 
fendants '  held  the  plaintiff  by  the  wrists '  —  they  had  a  large  encum- 
brance on  his  lands.  He  was  being  pressed  by  other  creditors  and  un- 
less he  could  secure  a  release  of  the  defendants'  incumbrance,  and  thus 
be  enabled  to  make  a  disposition  of  the  property,  he  was  likely  to  be- 
come a  bankrupt,  or,  at  least,  suffer  a  great  sacrifice  and  loss  of  his 
property.  In  order  to  extricate  himself  from  this  embarrassing  situa- 
tion he  must  have  his  property  disencumbered,  and  this  could  be  accom- 
plished only  by  the  payment  of  the  defendants'  illegal  exaction.  He  was 
practically  confronted  with  the  question  whether  or  not  he  should  pay 
the  defendants  the  amount  exacted,  or  suffer  the  serious  consequences 
to  be  reasonably  apprehended  from  a  refusal  to  do  so.  The  payment 
under  such  circumstances,  it  seems  to  us,  would  be  under  an  urgent 
necessity  —  under  a  kind  of  moral  duress.  Duress  may  be  shown  with 
respect  to  real  property  as  well  as  personal  so  as  to  render  payment  on 
account  of  it  involuntary  and  permit  it  to  be  recovered  back." 

345 


§  218]  CONSTRAINT  OF  DURESS  [Part  III 

can  be  sold,  the  payment  can  hardly  be  said  to  be  made  under 
coercion.1  But  if  it  is  a  summary  foreclosure  —  as  by  ad- 
vertisement and  sale  under  a  power  contained  in  the  mortgage 
—  duress  may  reasonably  be  inferred.  In  the  latter  case,  by 
the  weight  of  authority,  money  paid  to  stop  the  proceedings, 
either  by  the  owner  or  by  a  subsequent  mortgagee,  may  be 
recovered.2 

§  218.  (5)  Injury  to  business.  —  Closely  resembling  cases  of 
seizure  or  detention  of  property  (ante,  §  216)  are  those  of  actual 
or  threatened  serious  injury  to  business  or  employment.  To 
imperil  a  man's  livelihood,  his  business  enterprises,  or  his 
solvency,  is  ordinarily  quite  as  coercive  as  to  detain  his  property. 
It  is  manifestly  impossible,  however,  to  frame  a  test  whereby 
to  determine  precisely  what  the  nature  or  extent  of  the  injury 
or  interference  must  be  in  order  to  constitute  duress.  Each 
case  must  be  judged  in  the  light  of  its  peculiar  circumstances. 
The  courts  have  recognized  this,  and  have  generally  dealt 
with  the  subject  in  a  commendable  spirit  of  liberality.  Threats 
of  expulsion  or  suspension  from  a  labor  union ; 3  taking  steps 
to  prevent  the  collection  of  money  due  from  other  persons;4 

1  Vereycken  v.  Vandenbrooks,  1894,  102  Mich.  119 ;  60  N.  W.  687. 

2  Close  v.  Phipps,  1844,  7  Man.  &  G.  586  ;  Whitcomb  v.  Harris,  1897, 
90  Me.  206;   38  Atl.  138;   Cazenove  v.  Cutler,  1842,  4  Mete.  (Mass.) 
246 ;  McMurtie  v.  Keenan,  1872,  109  Mass.  185 ;  Klein  v.  Bayer,  1890, 
81  Mich.  233 ;   45  N.  W.  991 ;   Bennett  v.  Healey,  1861,  6  Minn.  240. 
And  see   Joannin  v.  Ogilvie,  1892,  49  Minn.  564 ;   52  N.  W.  217 ;    16 
L.  R.  A.  376;  32  Am.  St.  Rep.  581.     But  see,  contra,  Wessel  v.  John- 
ston Land  Co.,  1893,  3  N.  D.  160 ;  54  N.  W.  922 ;  44  Am.  St.  Rep.  529 ; 
Burke  v.  Gould,  1894,  105  Cal.  277 ;  38  Pac.  733. 

3  Fuerst  v.  Musical,  etc.,  Union,  1905,  95  N.  Y.  Supp.  155,  160  (City 
Ct.,  Tr.  T.).    The  court  said :    "Plaintiff  knew  that  before  he  could 
appeal  to  the  courts  for  relief  he  must  exhaust  the  remedies  provided 
by  the  laws  of  the  organization,  and  to  prosecute  the  appeal  therein 
allowed  he  was  compelled  to  pay  the  amount  of  the  fine.     This  he  did 
on  the  last  day  allowed,  but  accompanied  the  payment  with  his  written 
protest.     He  feared  that  if  he  did  not  pay  the  money  on  that  day,  the 
president's  threat  would  become  effective  and  his  means  of  earning  a 
livelihood  in  his  chosen  occupation  destroyed.     That  threat,  coupled 
with  the  fear  induced  thereby,  amounts  in  law  to  duress."     See  also 
Carew  v.  Rutherford,  1870,  106  Mass.  1 ;   8  Am.  Rep.  287,  where  the 
Court  seemed  to  regard  it  as  a  tort. 

4  Vyne  v.  Glenn,  1879,  41  Mich.  112 ;  1  N.  W.  997. 

346 


Chap.  XV]  INJURY  TO  BUSINESS  [§218 

threats  of  a  business  manager,  who  alone  is  conversant  with 
important  matters,  to  resign  his  position ; 1  threats  of  a  water 
company  or  municipality  to  cut  off  the  water  supply  of  a  factory 
or  commercial  building ; 2  a  refusal  on  the  part  of  a  lessor,  whose 
interest  in  premises  is  protected  by  insurance  policies  taken  out 
by  the  lessee,  to  execute  proofs  of  loss  without  which  the  lessee 
cannot  collect  his  insurance  money ; 3  all  these  have  been  held 
sufficiently  coercive,  under  particular  circumstances,  to  raise 
an  obligation  to  repay  money  wrongfully  extorted  through  their 
instrumentality.4 

On  the  other  hand,  a  wrongful  refusal  on  the  part  of  a  brew- 
ing company  to  perform  a  contract  to  supply  beer  to  a  retailer 
has  been  declared  not  to  amount  to  duress,  though  the  retailer 
feared  that  he  might  have  difficulty  in  obtaining  a  supply  from 
other  brewers.5  And  the  same  court  which  held  that  taking 
steps  to  prevent  the  collection  of  money  due  from  others  is 
duress  decided  in  a  later  case  that  a  wrongful  refusal  to  pay 

1  Whitt  v.  Blount,  1906,  124  Ga.  671 ;  53  S.  E.  205.     There  were  also 
threats,  in  this  case,  to  keep  money,  contracts,  and  property  belonging 
to  the  persons  threatened. 

2  Panton  v.  Duluth  Gas  and  Water  Co.,  1892,  50  Minn.  175 ;  52  N.  W. 
527 ;   36  Am.  St.  Rep.  635 ;    Chicago  v.  Northwestern  Mut.  Life  Ins. 
Co.,  1905,  218  111.  40;  75  N.  E.  803 ;   1  L.  R.  A.  (N.  S.)  770;  Westlake 
».  City  of  St.  Louis,  1882,  77  Mo.  47 ;  46  Am.  Rep.  4. 

3  Guetzkow  Bros.  Co.  v.  Breese,  1897,  96  Wis.  591,  598 ;  72  N.  W.  45  ; 
65  Am.  St.  Rep.  83,   in  which  the  court  said :   "The  plaintiff  was  in  a 
position  where  it  must  obtain  its  insurance  money  at  once  in  order  to  go 
on  with  its  business  and  fulfill  valuable  outstanding  contracts,  or  it 
would  suffer  great  loss.     Under  these  circumstances  it  submitted  under 
protest  to  the  unjust  demand  in  order  to  obtain  its  own  money  from  the 
insurance  company.     This  makes  a  case  of  legal  duress  of  goods." 

4  See  also  Lehigh  Coal  &  Nav.  Co.  v.  Brown,  1882,  100  Pa.  St.  338, 
and  United  States  v.  Lawson,  1879,  101  U.  S.  164.     In  the  latter  case  a 
collector  of  customs  was  required  by  his  superior  officer,  Commissioner 
of  Customs,  to  turn  over  fees  to  the  U.  S.  Treasury.     By  law  he  was 
entitled  to  keep  these  fees  in  addition  to  his  salary.     He  paid  them  over 
and  brought  suit  to  recover.     CLIFFORD,  J. :  "Confessedly,  the  order  was 
official  and  peremptory,  and  under  such  circumstances  it  may  well  be 
inferred  the  party  felt  that,  if  he  refused  to  obey,  the  refusal  would  cost 
him  his  commission." 

5  Matthews  v  William  Frank  Brewing  Co..  1899,  26  Misc.  Rep.  46; 
55  N.  Y.  Supp.  241. 

347 


§  219]  CONSTRAINT  OF  DURESS  [Part  III 

one's  own  debt  under  similar  circumstances  of  hardship  to 
the  creditor  is  not  1  —  a  distinction  difficult  to  appreciate. 

Some  of  the  important  cases  of  interference  with  business 
have  arisen  under  statutes  imposing  penalties  for  the  non- 
payment of  taxes.  They  are  considered  in  another  section 
(post,  §  242). 

§  219.  (6)  Oppressive  refusal  to  discharge  a  duty :  (a)  Illegal 
fees  of  public  officers.  —  Only  under  circumstances  of  peculiar 
hardship  —  as,  for  example,  where  a  person's  solvency  is  en- 
dangered —  will  a  mere  refusal  by  a  private  individual  to  dis- 
charge his  legal  duty  to  another  be  held  to  constitute  duress 
(ante,  §  2!  8).  But  in  the  case  of  a  refusal  by  a  public  officer 
to  perform  a  duty,  the  courts,  recognizing  the  inherent  advantage 
of  his  position  and  the  importance  of  protecting  those  who  deal 
with  him,  require  no  additional  evidence  that  the  act  is  coercive. 
It  is  therefore  a  general  rule  that  illegal  or  excessive  fees  exacted 
by  a  public  officer,  colore  officii,  as  a  condition  to  the  performance 
of  his  duty,  may  be  recovered: 

Morgan  v.  Palmer,  1824,  2  Barn.  &  Cr.  729 :  Assumpsit  to 
recover  a  fee  illegally  charged  by  a  mayor  for  renewing  a  publi- 
can's license.  ABBOTT,  C. J.  (p.  734) :  "  It  has  been  well 
argued  that  the  payment  having  been  voluntary,  it  cannot  be 
recovered  back  in  an  action  for  money  had  and  received.  I 
agree  that  such  a  consequence  would  have  followed  had  the  par- 
ties been  on  equal  terms.  But  if  one  party  has  the  power  of 
saying  to  the  other,  'that  which  you  require  shall  not  be  done 
except  upon  the  conditions  which  I  choose  to  impose,'  no  per- 
son can  contend  that  they  stand  upon  anything  like  an  equal 
footing.  Such  was  the  situation  of  the  parties  to  this  action." 

American  Steamship  Co.  v.  Young,  1879,  89  Pa.  St.  186 ; 
33  Am.  Rep.  748:  Action  to  recover  excessive  shipping  fees 
paid  to  a  United  States  Shipping  Commissioner.  STERRETT, 
J.  (p.  191) :  "We  think  that  sound  public  policy  requires  us 
to  hold  that  a  public  officer  who,  virtute  officii,  demands  and  takes 
as  fees  for  his  services,  what  is  not  authorized  or  more  than  is 
allowed  by  law,  should  be  compelled  to  make  restitution.  He 

1  Hackley  v.  Headley,  1881,  45  Mich.  569 ;  8  N.  W.  511. 
348 


Chap.  XV]         REFUSAL   TO   DISCHARGE   A   DUTY  [§  219 

and  the  public  who  have  business  to  transact  with  him  do  not 
stand  upon  an  equal  footing.  It  is  his  special  business  to  be 
conversant  with  the  law  under  which  he  acts,  and  to  know 
precisely  how  much  he  is  authorized  to  demand  for  his  serv- 
ices; but  with  them  it  is  different.  They  have  neither  the 
time  nor  the  opportunity  of  acquiring  the  information  necessary 
to  enable  them  to  know  whether  he  is  claiming  too  much  or 
not ;  and  as  a  general  rule,  relying  on  his  honesty  and  integrity, 
they  acquiesce  in  his  demands."  1 

If  it  appears  that  the  officer's  refusal  to4  perform  his  duty 
would  not  have  resulted  in  any  injury  or  hardship  to  the  plain- 
tiff,2 or  that  the  money  sought  to  be  recovered  was  not  paid  to 
the  officer  until  after  the  expiration  of  his  term  of  office,3  res- 
titution will  not  be  enforced.  On  the  other  hand  it  is  not  a 
defense  that  the  officer  collected  the  illegal  or  excessive  fee  in 

1  Also :   Lovell  v.  Simpson,  1800,  3  Esp.  153,  (excessive  fee  charged 
by  sheriff's  officer  for  bail  bond) ;    Dew  v.  Parsons,  1819,  2  Barn.  & 
Aid.  562,  (sheriff  for  issuing  warrants);    Hills  v.  Street,  1828,  5.Bing. 
37,  (broker  holding  goods  on  a  distress) ;    Steele  v.  Williams,  1853,  8 
Exch.  625,  (parish  clerk  for  extracts  from  records) ;   Ogden  v.  Maxwell, 
1855,  3  Blatchf.    (U.  S.  C.  C.)  319 ;    Fed.  Cas,  No  10,458,  (collector 
of  port  for  permission  to  land  baggage) ;    Cook  County  v.  Fairbank, 
1906,  222  111.  578 ;  78  N.  E.  895,  (clerk  of  court  for  letters  testamentary) ; 
Clinton  v.  Strong,  1812,  9  Johns.  (N.  Y.)  370,  (clerk  of  court) ;   Robin- 
son v.  Ezzell,  1875,  72  N.  C.  231,  (register  of  deeds) ;   Hooker  v.  Gur- 

nett,  1858,  16  U.  C.  Q.  B.  (Ont.)  180,  (clerk  for  striking  special  jury) ; 
Alston  v.  Durant,  1847,  2  Strobh.  (S.  C.)  257 ;  49  Am.  Dec.  596,  (sheriff 
for  capturing  slave) ;  Hays  v.  Stewart,  1852,  8  Tex.  358,  (county 
surveyor  for  services).  And  see  Laterrade  v.  Kaiser,  1860,  15  La.  Ann. 
296,  (excessive  fee  demanded  by  lessee  of  market  house  for  use  of 
stalls) ;  Marcotte  ».  Allen,  1897,  91  Me.  74 ;  39  Atl.  346 ;  40  L.  R.  A. 
185,  (illegal  fee  paid  city  clerk  for  burial  permits ;  decision  on  ground 
of  fraud) ;  Niedermeyer  v.  Curators  of  the  University  of  Missouri, 
1895,  61  Mo.  App.  654,  (excessive  tuition  fees  paid  under  protest  to 
the  treasurer  of  State  University) ;  Ford  v.  Holden,  1859,  39  N.  H. 
143,  (abated  tax  paid  in  order  that  payer's  name  might  be  put  on 
register  of  voters) ;  Soderberg  v.  King  County,  1896,  15  Wash.  194 ; 
45  Pac.  785;  33  L.  R.  A.  670;  55  Am.  St.  Rep.  878,  (commission 
illegally  retained  by  sheriff  out  of  proceeds  of  foreclosure  sale). 

2  Taylor  v.  Hall,  1888,  71  Tex.  213 ;  9  S.  W.  141. 

3  Sheibley  v.  Cooper,  1907,  79  Neb.  232,  236;  112  N.  W.  363.     "It 
is  not  a  case  of  official  extortion  or  oppression,  but  an  ordinary  trans- 
action between  two  men  dealing  on  equal  terms." 

349 


§  220]  CONSTRAINT  OF  DURESS  [Part  III 

good  faith  and  for  the  public  benefit,1  or  that  the  money  has 
been  turned  into  the  public  treasury,2  although  in  the  latter 
event  the  municipality  is  also  liable.3 

§  220.  (6)  Illegal  charges  of  public  service  corporations.  - 
Common  carriers  and  some  other  public  service  corporations 
usually  enjoy  an  advantage  of  position  not  unlike  that  of  public 
officers.  It  is  accordingly  held  that  illegal  freights,  tolls,  or 
other  charges  exacted  by  corporations  enjoying  such  an  ad- 
vantage may  be  recovered  as  money  paid  under  compulsion : 

Great  Western  R.  Co.  v.  Sutton,  1869,  L.  R.  4  H.  L.  226 ; 
LORD  CHELMSFORD,  (p.  263) :  "  Now  if  the  defendants  were 
bound  to  charge  the  plaintiff  for  the  carriage  of  his  goods  a 
less  sum,  and  they  refused  to  carry  them  except  upon  payment 
of  a  greater  sum,  as  he  was  compelled  to  pay  the  amount 
demanded,  and  could  not  otherwise  have  his  goods  carried,  the 
case  falls  within  the  principle  of  several  decided  cases,  in  which 
it  has  been  held  that  money  which  a  party  has  been  wrongfully 
compelled  to  pay  under  circumstances  in  which  he  was  unable 
to  resist  the  imposition,  may  be  recovered  back  in  an  action 
for  money  had  and  received.  In  the  language  of  the  Court 
of  Common  Pleas,  in  the  case  of  Parker  v.  The  Great  Western 
Railway  Company  [1844,  7  Man.  &  G.  253],  'the  payments  made 
by  the  plaintiff  were  not  voluntary,  but  were  made  in  order  to 
induce  the  company  to  do  that  which  they  were  bound  to  do 
without  them.'"4 

1  Steele  v.  Williams,  1853,  8  Exch.  625 ;    Ogden  ».  Maxwell,  1855, 
3  Blatehf.  (U.  S.  C.  C.)  319 ;  Fed.  Gas.,  No.  10,458 ;  American  Steam- 
ship Co.  v.  Young,  1879,  89  Pa.  St.  186 ;  33  Am.  Rep.  748. 

2  Ogden  v.  Maxwell,  1855,  3  Blatehf.  (U.  S.  C.  C.)  319 ;  Fed.  Cas., 
No.  10,458.     And  see  Snowden  v.  Davis,  1808,  1  Taunt.  359 ;   Ripley 
v.  Gelston,  1812,  9  Johns.  (N.  Y.)  201 ;  6  Am.  Dec.  271. 

3Soderberg  ».  King  County,  1896,  15  Wash.  195;  45  Pac.  785; 
33  L.  R.  A.  670 ;  55  Am.  St.  Rep.  878. 

4  Also :  Parker  v.  Great  Western  R.  Co.,  1844,  7  Man.  &  G.  253 ; 
Tutt  v.  Ide,  1855,  3  Blatehf.  (U.  S.  C.  C.)  249 ;  Fed.  Cas.,  No.  14,275  6., 
(detention  of  goods) ;  Mobile,  etc.,  R.  Co.  v.  Steiner,  1878,  61  Ala.  559 ; 
Chicago,  etc.,  R.  Co.  v.  Chicago,  etc.,  Coal  Co.,  1875,  79  111.  121 ;  Lafay- 
ette, etc.,  R.  Co.  v.  Pattison,  1872,  41  Ind.  312;  Heiserman  v.  Bur- 
lington, etc.,  R.,  1884,  63  la.  732  ;  18  N.W.  903  ;  McGregor  v.  Erie  R. 
Co.,  1871,  35  N.  J.  L.  89 ;  Harmony  v.  Bingham,  1854,  12  N.Y.  99 ; 
62  Am.  Dec.  142,  (detention  of  goods) ;  Peters,  Rickers  &  Co.  v.  R.  Co., 

350 


Chap.  XV]         REFUSAL   TO   DISCHARGE   A   DUTY  [§  220 

In  many  of  the  reported  cases,  as  might  be  expected,  condi- 
tions of  peculiar  hardship  appear,  and  to  a  greater  or  less  extent 
are  emphasized  by  the  court.  This  does  not  necessarily  mean 
that  in  the  absence  of  such  conditions  relief  would  not  have  been 
granted.  But  there  are  a  few  decisions  in  which  it  is  insisted 
that  there  must  always  be  evidence  not  only  of  an  illegal  demand, 
but  of  special  circumstances  showing  "  an  added  element  of 
compulsion."  1  These  cases,  it  is  submitted,  indicate  a  failure 
fully  to  appreciate  the  inequality  of  the  normal  conditions 
under  which  one  deals  with  a  public  service  corporation  —  an 
inequality  which  makes  it  unnecessary  for  the  corporation  to 
resort  to  threats  and  futile  for  the  individual  to  protest  or  com- 
plain, —  as  well  as  the  importance,  as  a  matter  of  public  policy, 
of  discouraging  the  violation  of  rate  laws.2  The  better  rule,  in 
the  case  of  public  service  corporations,  as  in  that  of  public  offi- 
cers, is  that  the  exaction  of  the  illegal  charge  is  itself  sufficiently 
coercive  to  raise  an  obligation  to  make  restitution. 

An  exception  should  perhaps  be  noted  where  the  illegal  charge 
is  not  demanded  by  the  corporation  until  the  service  has  been 

1884,  42  Oh.  St.  275;  51  Am.  Rep.  814;  Lehigh  Coal  &  Nav.  Co. 
v.  Brown,  1882,  100  Pa.  St.  338;  Monongahela  Nav.  Co.  v.  Wood, 
1899,  194  Pa.  St.  47  ;  45  Atl.  73.  See  Pine  Tree  Lumber  Co.  v.  Chicago, 
etc.,  R.  Co.,  1909,  123  La.  583  ;  49  So.  202,  to  the  effect  that  the  Inter- 
state Commerce  Act  has  not  deprived  the  shipper  of  his  common  law 
right  to  restitution. 

Where  the  illegal  charge  is  paid  in  ignorance  of  its  illegality,  resti- 
tution might  be  enforced  upon  the  ground  of  mistake  and  without  ref- 
erence to  the  question  of  duress.  See  Evershed  v.  London,  etc.,  R. 
Co.,  1877,  3  Q.  B.  D.  134,  147.  But  the  mistake  is  generally  one  of 
law,  which  in  most  jurisdictions  does  not  constitute  a  basis  for  relief. 

1  Arnold  v.  Georgia  R.  &  B.  Co.,  1873,  50  Ga.  304;    Illinois  Glass 
Co.  v.  Chicago  Telephone  Co.,  1908,  234  111.  535 ;  85  N.  E.  200 ;    18 
L.  R.  A.  (N.  S.)  124;   Potomac  Coal  Co.  v.  Cumberland,  etc.,  R.  Co., 
1873,  38  Md.  226.     And  see  Killmer  v.  New  York,  etc.,  R.  Co.,  1885, 
100  N.  Y.  395 ;    3  N.  E.  293 ;    53  Am.  Rep.  194.     For  an  excellent 
criticism  of  Illinois  Glass  Co.  v.  Chicago  Telephone  Co.,  supra,  see  3 
Illinois  Law  Rev.  235. 

2  Statutory  penalties,  it  is  true,  are  generally  provided,  but  they 
are  sometimes  inadequate  and  in  any  case  should  not  deprive  one  of 
his  common  law  right  to  enforce  restitution.     Mobile,  etc.,  R.  Co.  v. 
Steiner,   1878,   61   Ala.   559 ;   Heiserman  v.  Burlington,  etc.,  R.  Co., 
1884,  63  la.  732 ;    18  N.  W.  903. 

351 


§  221]  CONSTRAINT  OF  DURESS  [Part  III 

performed.  In  such  a  case  the  demand  can  hardly  be  said  to  be 
coercive,1  unless,  as  must  frequently  be  true,  it  creates  a  fear  in 
the  mind  of  the  shipper  or  consumer  that  a  failure  to  comply 
will  prejudice  his  interests  in  future  dealings  with  the  corpora- 
tion.2 

§221.  Same:  Necessity  of  protest.  —  In  nearly  all  of  the 
cases  cited  in  the  preceding  section  the  fact  that  the  payment  of 
the  illegal  charges  was  made  under  protest  is  shown.  It  is 
natural,  of  course,  that  a  protest  should  be  made.  And  in 
jurisdictions  in  which  "  an  added  element  of  compulsion  "  must 
be  established,  the  fact  of  a  protest  at  the  time  of  payment  is  of 
evidential  value,  though  not  always  essential  to  the  plaintiff's 
case.3  But  where  the  rule  is  adopted  that  the  exaction  of  an 
illegal  'charge  is  itself  sufficiently  coercive  to  raise  an  obligation 
to  make  restitution,  a  protest  is  superfluous : 

Heiseman  v.  Burlington,  etc.,  R.,  1884,  63  la.  732 ;  18  N.  W. 
903:  BECK,  J.  (p.  736):  "Nor  need  the  plaintiff,  in  a  case 
brought  to  enforce  such  an  obligation  [the  obligation  to  repay 
excess  charges],  show  objection  or  protest  prior  to  the  payment 
made  in  excess  of  a  reasonable  compensation.  These  rules 
are  founded  upon  the  consideration  that  railroad  companies 
are  public  carriers,  and  those  who  employ  them  are  in  their 
power,  and  must  bow  to  the  rod  of  authority  which  they  hold 
over  consignors  and  consignees  of  property  transported  by 
them.  .  .  .  The  law  does  not  require  objection  or  protest  to  the 

1  Knudson,  etc.,  Co.  v.  Chicago,  etc.,  R.  Co.,  1906,  149  Fed.  973 ; 
79  C.  C.  A.  483 ;   Kenneth  v.  So.  Car.  R.,  1868,  15  Rich.  L.  (S.  C.)  284 ; 
98  Am.  Dec.  382.     And  see  Killmer  v.  New  York,  etc.,  R.  Co.,  1885, 
100  N.  Y.  395 ;   3  N.  E.  293 ;   53  Am.  St.  Rep.  194.     But  see  Steele  v. 
Williams,  1853,  8  Exch.  625,  631,  which  was  an  action  to  recover  fees 
paid  a  parish  clerk  for  the  privilege  of  making  abstracts  from  the  regis- 
ter of  burials  and  baptisms.     The  plaintiff's  clerk  was  informed  of 
the  amount  of  the  fee  before  he  made  the  abstracts,  but  he  was  not 
required   to   pay  until  afterward.     The   court   allowed    a    recovery, 
saying  that  "it  would  have  been  most  dishonorable  for  the  party, 
after  having  got  the  extracts,  to  refuse  to  pay." 

2  Peters  v.  R.  Co.,  1884,  42  Oh.  St.  275  ;  51  Am.  Rep.  814.     And  see 
West  Va.  Transp.  Co.  v.  Sweetzer,  1885,  25  W.  Va.  434,  461-2. 

3  Illinois  Glass  Co.  v.  Chicago  Telephone  Co.,  1908,  234  111.  535 ; 
85  N.  E.  200;   18  L.  R.  A.  (N.  S.)  124. 

352 


Chap.  XV]  REFUSAL  TO   LOAN   MONEY  [§  222 

payment  of  unjust  charges,  for  the  reason  that  they  would  be 
vain,  being  addressed  to  those  who  occupy  the  commanding 
position  of  power  to  enforce  obedience  to  their  requirements."  * 

Under  this  rule,  indeed,  the  plaintiff's  ignorance  of  the  ille- 
gality of  the  charge,  at  the  time  of  payment,  should  not  prevent 
a  recovery.  For  one  who  is  compelled  to  pay  a  charge,  whether 
it  is  legal  or  illegal,  has  no  incentive  to  question  its  legality  before 
making  payment,  and  is  none  the  less  under  compulsion  because 
of  his  failure  so  to  do. 

§  222.  (7)  Oppressive  refusal  to  loan  money  at  legal  rate  of 
interest.  —  Although  it  appears  to  have  been  held  at  one  time 
that  usurious  interest,  i.e.  interest  in  excess  of  the  rate  allowed 
by  law  to  be  charged,  could  not  be  recovered,2  the  rule  was  long 
ago  settled,  in  England,  that  assumpsit  will  lie  to  recover  such 
interest  as  money  paid  under  compulsion.3  In  1854,  however, 
the  English  usury  laws  were  repealed,4  and  the  only  relief  now 
afforded  the  oppressed  debtor  is  that  provided  by  the  Money- 
lenders Act,  1900,6  which  enacts,  in  substance,  that  where  an 
action  is  brought  by  a  person  engaged  in  the  business  of  money 
lending,  and  there  is  evidence  which  satisfies  the  court  that  the 
interest  charged  is  excessive  and  that  the  transaction  is  harsh 
and  unconscionable,  the  court  may  reopen  the  transaction, 
relieve  the  debtor  from  the  payment  of  any  sum  in  excess  of 
that  fairly  and  reasonably  due,  and  if  any  such  excess  has  been 
paid,  order  the  creditor  to  repay  it. 

The  common  law  rule  that  usurious  interest  may  be  recovered 

1  Accord :  Mobile,  etc.,  R.  Co.  v.  Steiner,  1878,  61  Ala.  559.     And  see 
Fairford  Lumber  Co.  v.  Tombigbee,  etc.,  R.  Co.,  1910,  165  Ala.  275 ; 
51  So.  770,  772. 

2  Tomkins  v.  Bernet,  1693,  1  Salk.  22. 

3  See  Astley  v.  Reynolds,  1731,  2  Strange  915;  Bosanquett  v.  Dash- 
wood,  1734,  Cas.  t.  Talb.  38,  (in  equity) ;    Smith  v.  Bromley,  1760, 
2  Doug.  696 ;  Clarke  v.  Shee,  1774,  1  Cowp.  197. 

4 17  &  18  Viet.  c.  90.  This  repeal  did  not  deprive  the  High  Court 
of  its  equitable  jurisdiction  to  give  relief  against  unconscionable  bar- 
gains between  expectant  heirs  or  needy  persons  and  money  lenders, 
where  an  unfair  advantage  had  been  taken.  See  James  v.  Kerr,  1888, 
40  Ch.  D.  449. 

5  63  &  64  Viet.  c.  51.     See  Samuel  v.  Newbold,  [19061  A.  C.  461. 

353 


§  222]  CONSTRAINT  OF  DURESS  [Part  III 

has  been  adopted,  either  by  statute  or  by  judicial  decision,  in 
many  of  the  United  States.1  Moreover,  it  has  frequently  been 
held  that  in  the  absence  of  an  express  abrogation  of  the  common 
law  remedy,  the  imposition  of  a  statutory  penalty  for  taking 
usurious  interest  —  as  double  or  treble  the  amount  illegally 
received  —  does  not  deprive  the  debtor  of  his  common  law  right 
to  sue  for  the  excess  interest  alone.2  Said  Chief  Justice  DIXON 
in  a  Wisconsin  case : 3 

"If  the  borrower  chooses,  by  not  bringing  his  action  within 
one  year  [the  period  fixed  by  the  statute  within  which  an  action 
to  enforce  the  penalty  must  be  commenced],  to  waive  his  right 
to  a  treble  recovery,  he  may  do  so  and  still  retain  the  right  to 
maintain  an  action  for  money  had  and  received,  to  recover 
back  the  excess  actually  paid,  at  any  time  within  the  period 
prescribed  by  the  statutes  of  limitations.  For  the  remedy 
given  by  the  statute  is  cumulative  and  not  exclusive,  as  has 
frequently  been  decided  in  other  States  where  similar  statutory 
remedies  have  been  given." 

In  a  number  of  States,  on  the  other  hand,  either  because  the 
statute  expressly  makes  it  lawful  to  pay  and  receive  any  rate 

1  Wood  v.  Cuthberson,  1884,  3  Dak.  328 ;  21  N.  W.  3 ;   State  Bank 
v.  Ensminger,  1884,  7  Blackf.   (Ind.)   105 ;   Baum  ».  Thorns,  1897,  150 
Ind.  378;  50N.E.  357;  65  Am.  St.  Rep.  368 ;  Sherley  v.  Trabue,  1887, 
85  Ky.  71 ;   2  S.  W.  656 ;   Furlong  v.  Pearce,  1864,  51  Me.  299 ;   Scott 
v.  Leary,  1871,  34  Md.  389 ;  Commercial  Bank  v.  Auze,  1897,  74  Miss. 
609 ;   21  So.  754 ;    Brown  v.  Mclntosh,  1876,  39  N.  J.  L.  22 ;    Hintze 
v.  Taylor,  1894,  57  N.  J.  L.  239 ;   30  Atl.  551 ;   Wheaton  ».  Hibbard, 
1822,  20  Johns.  (N.  Y.)  290;    11  Am.  Dec.  284;    Cheek  v.  Iron  Belt 
Bldg.  Asso.,  1900, 127  N.  C.  121 ;  37  S.  E.  150 ;   Melton  v.  Snow,  1909, 
24  Okla.  780 ;   104  Pac.  40 ;  Philanthropic  Building  Asso.  v.  McKnight, 
1860,  35  Pa.  St.  470;    Miners'  Trust  Co.  Bank  v.  Roseberry,  1876, 
81  Pa.  St.  309 ;  Bexar  Building  Asso.  v.  Robinson,  1890,  78  Tex.  163 ; 
14  S.  W.  227 ;  9  L.  R.  A.  292  ;  22  Am.  St.  Rep.  36 ;  Nichols  v.  Bellows, 
1849,  22  Vt.  581 ;  54  Am.  Dec.  85 ;   Harper  v.  Middle  State  Co.,  1904, 
55  W.  Va.  149 ;  46  S.  E.  817 ;   Wood  v.  Lake,  1860,  13  Wis.  84. 

2  Baum  v.  Thorns,  1897,  150  Ind.  378 ;    50  N.  E.  357 ;    65  Am.  St. 
Rep.  368;   Wheaton  v.  Hubbard,  1822,  20  Johns.  (N.  Y.)  290;   11  Am. 
Dec.  284 ;    Porter  ».  Mount,  1863,  41  Barb.  (N.  Y.)  561 ;    Wilson  v. 
Selbie,  1895,  7  S.  D.  494 ;   64  N.  W.  537  ;  Wood  v.  Lake,  1860,  13  Wis. 
84 ;   Schriber  v.  Le  Clair,  1886,  66  Wis.  579,  29  N.  W.  570,  889. 

8  Wood  v.  Lake,  1860,  13  Wis.  84,  97. 

354 


Chap.  XV]  REFUSAL  TO   LOAN  MONET  [§  223 

of  interest,1  or  because  a  penalty  imposed  by  statute  is  regarded 
as  a  substitute  for  the  common  law  remedy,2  or  because  the 
statute  is  construed  to  mean  that  contracts  for  usurious  in- 
terest are  merely  unenforceable  as  to  such  interest  and  not 
illegal  or  void,3  the  right  to  restitution  is  denied. 

§  223.    Same :    Right    to  recover  usury:     Upon  principle.  - 
Two  distinct  doctrines  of  quasi  contract  may  be  summoned  to 
the  support  of  the  rule  that  usurious  interest  is  recoverable. 
One  is  that  an  unjust  enrichment  resulting  from  the  performance 
of  an  illegal  contract  raises  an  obligation  to  make  restitution 

1  Marvin .  v.  Mandell,  1878,   125   Mass.  562;    Brundage  v.  Burke, 
1895,  11  Wash.  679;  40  Pac.  343.     See  Cal.  Civil  Code,  §  1918. 

2  Carter  v.  Carusi,  1884,  112  U.  S.  478;     5   S.   Ct.  281,  (Dist.  of 
Cbl.) ;  Matthews  v.  Paine,  1885,  47  Ark.  54 ;    14  S.  W.  463 ;  Nichols  v. 
Skeel,  1861,  12  la.  300,  (forfeiture  goes  to  school  fund) ;    Crosby  v. 
Bennett,  1843,  7  Mete.  (Mass.)  17 ;    Ransom  v.  Hayes,  1867,  39  Mo. 
445,  (forfeiture  goes  to  school  fund).     In  Nichols  v.  Skeel,  supra,  it  was 
also  declared  that  the  parties  were  in  pari  delicto.     Upon  that  point 
see  the  following  section. 

3  Gross  ».  Coffey,  1896,  111  Ala.  468 ;  20  So.  428 ;   Hadden  ».  Innes, 
I860,  24  111.  382 ;   Gist  v.  Smith,  1880,  78  Ky.  367 ;   Woolfolk  ».  Bird, 
1876,  22  Minn.  341 ;    Blain  ».  Willson,  1891,  32  Neb.  302 ;  49  N.  W. 
224 ;    Merchants  Bank  v.  Lutterloh,   1879,  81  N.  C.  142 ;    Beach  v. 
Guaranty   Sav.   Assn.,  1904,  44  Or.  530;    76.  Pac.  16.     In   Gross  v. 
Coffey,  supra,  MCCLELLAN,  J.  said  (p.  475) :   "At  common  law   such 
recovery  was  allowed,  and  in  many  of  the  states  the  action  is  sustained. 
The  ruling,  however,  at  common  law  and  in  those  states,  except  when 
their  statutes  expressly  or  impliedly  authorize  this  action,  goes  upon 
the  theory  that  a  contract  to  pay  usury  is  illegal  and  void,  and  not 
voidable  merely ;    and  the  main  difference  between  the  statutes  in 
the  states  referred  to  and  our  own  lies  in  the  fact  that  they  either  in 
terms  declare,  or  have  been  construed  and  held  to  declare,  such  con- 
tracts absolutely  void,  while  the  statutes  of  Alabama  do  not  so  declare, 
but  only  provide  that  a  usurious  contract  cannot,  when  the  objection 
is  properly  taken  to  it,  be  enforced  in  respect  to  the  usury  or  interest, 
but  may  be  as  to  the  principal,  and  have  uniformly  been  held  to  render 
such  contracts  to  that  extent  voidable  at  the  election  of  the  payor, 
but  not  in  and  of  themselves  illegal  and  void.  ...     So  that,  if  the 
question  were  an  open  one  in  this  court,  we  should  not  hesitate  to  de- 
clare that  usury  voluntarily  paid,  as  it  was  in  the  case  at  bar,  if  paid 
at  all,  cannot  be  recovered  back  in  an  action  of  assumpsit.     The  prom- 
ise to  pay  it  is  not  illegal  and  void,  but  voidable  only,  at  the  elec- 
tion of  the  promisor.     Not  availing  himself  of  the  statutory  defense, 
it  cannot  be  said  that  his  act  in  paying  or  the  promisee's  act  in  receiv- 
ing usury  is  illegal." 

355 


§  223]  CONSTRAINT   OF  DURESS  [Part  III 

which  may  be  enforced  if  the  plaintiff  is  not  in  pari  delicto;  the 
other,  that  a  benefit  conferred  under  compulsion  must  be  re- 
stored. The  former  doctrine  seems  to  fit  the  case  perfectly. 
Since  the  charging  of  usurious  interest  is  prohibited,  a  contract 
to  pay  and  receive  it  is  illegal,  at  least  to  the  extent  of  the  usury. 
And  since  the  borrower  is  presumed  to  be  at  the  mercy  of  the 
lender  when  the  contract  is  entered  into,  he  is  not  in  pari  delicto 
(ante,  §  141).  The  latter  doctrine  —  that  a  benefit  conferred 
under  compulsion  must  be  restored  —  is  not  so  clearly  appli- 
cable. Admitting  the  presumption  of  duress  at  the  inception  of 
the  contract,  does  it  follow  that  duress  continues  throughout 
its  performance?  Conceivably  it  may,  as  where  the  borrower 
anticipates  the  necessity  of  borrowing  again  in  the  future.  But 
under  ordinary  circumstances,  as  soon  as  the  borrower  receives 
the  money  his  necessities  are  relieved  and  he  is  no  longer  at 
the  mercy  of  the  lender.  If  he  nevertheless  pays  the  excessive 
interest  demanded  of  him,  it  would  hardly  seem  that  he  does 
so  under  compulsion.  As  Professor  Keener  says,1  "  While  one 
attempting  to  borrow  money  may,  because  of  his  necessities, 
be  somewhat  restrained  in  the  exercise  of  his  volition,  it  seems 
difficult  to  say  that  a  payment  made  by  one  who  has  the  right 
to  refuse  to  pay,  is  a  payment  made  under  compulsion." 

An  examination  of  the  cases  will  show  that  the  courts  have 
frequently  linked  the  two  doctrines  together  in  support  of  the 
right  to  recover.  A  typical  judicial  statement  is  that  of  the 
Supreme  Court  of  New  Jersey,  in  Brown  v.  Mclntosh:* 

"No  payment  obtained  through  oppression  or  undue  ad- 
vantage is  voluntary,  and  the  law  presumes  every  payment 
made  to  a  person  who  is  by  statute  forbidden  to  receive  it, 
where  the  statute  is  for  the  protection  of  the  payer,  as  made 
through  oppression  and  undue  advantage." 

But  the  right  has  usually  been  regarded  as  resting  chiefly 
upon  the  doctrine  of  benefits  conferred  under  compulsion, 
and  the  cases  may  conveniently  be  treated  under  that  head. 

1  "Quasi-Contracts,"  p.  436.  2 1876,  39  N.  J.  L.  22,  26. 

356 


Chap.  XV]  REFUSAL   TO   LOAN  MONEY  [§224 

§  224.  Same :  Right  to  recover  from  assignee  of  usurer.  — 
The  assignee  of  a  loan  who  collects  from  the  borrower  usurious 
interest  on  the  principal  is  obviously  in  no  better  position  than 
the  original  lender,  and  must  make  restitution.  The  same  is 
true  of  the  assignee  of  a  note  given  for  usurious  interest  who 
receives  payment  thereof, 1  unless  he  is  an  innocent  purchaser 
for  value.  An  innocent  purchaser  for  value  of  negotiable  paper, 
before  maturity,  takes  it  freed  from  the  defense  of  usury,2  except 
where  the  note  is  by  statute  void  for  usury,3  and  therefore  can- 
not be  compelled  to  make  restitution.  And  while  an  innocent 
purchaser  for  value  of  non-negotiable  paper  takes  it  subject  to 
such  defense,4  there  is  no  injustice  in  his  retention  of  money 
received  in  payment  thereof,  and  consequently  he  is  likewise 
under  no  quasi  contractual  obligation.  However,  the  maker 
who  pays  to  an  innocent  purchaser  for  value  is  not  without 
remedy,  for  he  may  recover  from  the  payee  5  —  at  least  to  the 
extent  of  the  amount  realized  by  the  payee  from  the  sale  of  the 
note  over  and  above  the  amount  which  he  might  legally  have 

1  See  Eggen  v.  Huston,  1890,  12  Ky.  Law  Rep.  158 ;  13  S.W.  919 ; 
Williams  v.  Wilder,  1865,  37  Vt.  613. 

2  Tilden  v.  Blair,  1874,  21  Wall.  (U.  S.)  241 ;  Conkling  v.  Underbill, 
1842,  3  Scram.   (4  111.)  388;    Wortendyke  v.  Meehan,  1879,  9   Neb. 
221 ;  2  N.  W.  339;  Bradshaw  v.  Vanvalkenburg,  1896,  97  Tenn.  316; 
37  S.  W.  88 ;  Lynchburg  Nat.  Bank  v.  Scott,  1895,  91  Va.  652 ;  22  S.  E. 
487  ;   29  L.  R.  A.  827  ;   50  Am.  St.  Rep.  860. 

3  Lowe  v.  Waller,  1781,  2  Doug.  736;    Bridge  v.  Hubbard,  1818, 
15  Mass.  96;   8  Am.  Dec.  86;    Union  Nat.  Bank  v.  Fraser,  1885,  63 
Miss.  231;    Wilkie  v.  Roosevelt,  1802,  3  Johns.  Cas.  (N.  Y.)  206;  2 
Am.  Dec.  149;   Ward  v.  Sugg,  1893,  113  N.  C.  489;    18  S.  E.  717;  24 
L.  R.  A.  280;  Galliard  v.  Le  Seigneur,  1841,  1  McMull.  L.  (S.  C.)  225; 
Gilder  v.  Hearne,  1890,  79  Tex.  120;   14  S.  W.  1031. 

4  Allison  v.  Barrett,   1864,   16  la.  278;    Wing  v.  Dunn,   1844,  24 
Me.   128,  (after  maturity) ;    Doll  ».  Hollenbeck,    1886,  19  Neb.  639 ; 
28  N.  W.  286 ;    Chapin   v.   Thompson,    1880,   23   Hun  (N.  Y.   Sup. 
Ct.)  12,  16;    Zeigler  v.  Maner,   1898,  53  S.  C.   115;   30  S.  E.  829; 
69   Am.   St.   Rep.  842;  Aldrich  v.  Wood,  1870,  26  Wis.  168,   (after 
maturity). 

5  Woodworth  v.    Huntoon,    1865,  40   111.   131 ;    89  Am.  Dec.  340 ; 
Culver  v.  Osborne,  1907,  231111.  104;   83  N.  E.  110;  121  Am.  St.  Rep. 
302;  Lacy  v.  Brown,  1879,  67  Ind.  478;    Harbaugh  v.  Tanner,  1904, 
163  Ind.  574;  71  N.  E.  145;  Webb  v.  Wilshire,  1841,  19  Me.  406; 
Dunn  v.  Moore,  1875,  26  Oh.  St.  641. 

357 


§  226]  CONSTRAINT  OF  DURESS  [Part  III 

collected  from  the  maker.1  To  that  extent  the  payee  has  re- 
ceived a  benefit  the  retention  of  which  is  unjust. 

§  225.  Same :  Right  to  recover  before  principal  and  legal  in- 
terest are  paid.  —  It  is  a  general  rule,  sometimes  stated  without 
qualification,  that  there  is  no  right  to  recover  usurious  interest 
until  the  principal  and  legal  interest  are  fully  paid.2  In  other 
words,  the  creditor  may  insist  that  usurious  interest  received  by 
him  be  applied  in  diminution  of  the  lawful  debt.  If,  however, 
usurious  interest  is  paid  eo  nomine  and  in  satisfaction  of  an 
undertaking  separate  and  distinct  from  the  undertaking  to  pay 
principal  and  legal  interest,  it  would  seem  that  an  obligation  to 
make  restitution  arises  immediately,  although  the  lawful  debt 
is  still  unpaid.3 

§  226.  Same  :  Right  of  debtor  to  have  usurious  interest  ap- 
plied in  diminution  of  principal.  —  In  jurisdictions  in  which 
usurious  interest  paid  by  the  debtor  is  recoverable,  the  debtor 


1  Webb  v.  Wilshire,  1841,  19  Me.  406.     In  Atwell  v.  Gowell,  1867, 
54  Me.  358,  360,  the  court  said:    "When,  as  in  Webb  v.  Wilshire,  19 
Me.  406,  the  payee  of  a  note,  tainted  with  usury,  sells  it  for  the  full 
amount  due  on  it,  and  the  maker  afterwards  pays  that   amount   to 
the  holder,  an  action  against  the  payee  can  be  maintained,  because 
in  such  a  case  he  has  indirectly  received  the  usurious  interest.     But 
when,  as  in  this  case,  the  payee  sells  the  note  for  less  than  the  amount 
due  upon  it,  exclusive  of  usurious  interest,  the  proposition  that  he  is 
the  recipient  of  illegal  interest  cannot  be  maintained,  and  an  action 
will  not  lie  against  him." 

2  McBroom  v.  Scottish  Investment  Co.,  1894,  153  U.  S.  318 ;  14 
S.  Ct.  852 ;  Kendall  v.  Davis,  1892,  55  Ark.  318 ;   18  S.  W.  185 ;  Haw- 
kins ».  Welch,  1844,  8  Mo.  490. 

3  Grow  v.  Albee,  1847,  19  Vt.  540 ;  Nichols  v.  Bellows,  1849,  22  Vt. 
581 ;   54  Am.  Dec.  85.     In  Davis  v.  Converse,  1863,  35  Vt.  503,  507, 
the  court  said:    "It  seems  now  to  be  settled  by  repeated   decisions, 
that  where  usury  is  included  in  a  note  or  other  security,  and  when 
paid  is  indorsed  upon  the  note,  it  is  to  be  considered  as  a  payment  upon 
the  note  itself,  and  no  action  can  be  maintained  to  recover  back  the 
usury  paid,  so  long  as  there  remains  due  any  part  of  the  principal, 
and  lawful  interest,  but  that  where  the  security  is  only  for  the  principal 
and  legal  interest,  and  the  unlawful  interest  is  either  put  into  a  separate 
obligation,  or  rests  in  a  verbal  agreement,  so  that  when  paid   it   is 
not  indorsed  upon  the  note,  but  is  paid  as  usury  eo  nomine,  it  is  other- 
wise, and  a  right  of  action  accrues  immediately  to  sue  and  recover 
it  back,  though  the  lawful  debt  is  still  unpaid." 

358 


Chap.  XV]  REFUSAL   TO   LOAN   MONEY  [§  226 

undoubtedly  has  the  right  to  have  such  interest  applied  in  dimi- 
nution of  the  principal.1  Under  statutes  imposing  as  a  penalty 
for  taking  usury,  the  forfeiture  of  all  interest,  it  has  in  some 
cases  been  held  that  the  debtor  is  entitled  to  have  the  entire 
interest  paid  applied  upon  principal ; 2  but  in  other  cases  the 
right  of  application  under  such  statutes  has  been  limited  to  the 
amount  paid  in  excess  of  the  legal  rate.3  Where  the  recovery 

1McGee  v.  Long,  1889,  83  Ga.  156;  9  S.  E.  1107;  Thompson  v. 
Baird,  1895,  17  Ky.  Law  Rep.  403 ;  31  S.  W.  280 ;  New  York  Security 
Co.  v,  Davis,  1902,  96  Md.  81 ;  53  Atl.  669 ;  Adams  v.  Mahnken,  1886, 
41  N.  J.  Eq.  332 ;  7  Atl.  435 ;  Nunn  v.  Bird,  1900,  36  Or.  515 ;  59  Pac. 
808;  Nye  v.  Malo,  1857,  L.  C.  R.  (Queb.)  405;  First  Nat.  Bank  v. 
Wood,  1881,  53  Vt.  491 ;  Meem  ».  Dulaney,  1890,  88  Va.  674 ;  14  S.  E. 
363;  Norvell  v,  Hedriek,  1883,  21  W.  Va.  523.  But  see,  contra, 
Walsh  v.  Mayer,  1884,  111  U.  S.  31 ;  4  S.  Ct.  260. 

In  the  following  cases  the  statute  expressly  provided  for  applica- 
tion :  Atlanta  Sav.  Bank  v.  Spencer,  1899,  107  Ga.  629 ;  33  S.  E.  878 ; 
Bowen  v.  Phillips,  1876,  55  Ind.  226;  Vandergrif  v.  Swinney,  1900, 
158  Mo.  527 ;  59  S.  W.  71 ;  81  Am.  St.  Rep.  325 ;  Land  Mortgage,  etc., 
Co.  v.  Gillam,  1896,  49  S.  C.  345 ;  26  S.  E.  990 ;  29  S.  E.  203 ;  Libert 
v.  Unfried,  1907,  47  Wash.  186 ;  91  Pac.  776. 

2  Fowler  ».  Equitable  Trust  Co.,  1891,  141  U.  S.  384;   12  S.  Ct.  1, 
(lUinois  law) ;   Crane  v.  Goodwin,  1886,  77  Ga.  362 ;   Madsen  v.  Whit- 
man, 1902,  8  Idaho  762;    71  Pac.  152;    Fretz  v.  Murray,  1898,  118 
Mich.  302  ;  76  N.  W.  495  ;  Male  v.  Wink,  1901,  61  Neb.  748 ;  86  N.  W. 
472 ;  Wilson  v.  Selbie,  1895,  7  S.  D.  494 ;  64  N.  W.  537. 

3  Wood  v.  Cuthberson,   1884,  3  Dak.  328 ;    21  N.  W.  3.     Fay  v. 
Lovejoy,  1866,  20  Wis.  403,  405.  ("The  reason  is,"  said  the  court,  "that 
equity  never  favors  a  forfeiture,  and  will  not,  unless  bound  down  by 
statute,  lend  its  aid  to  enforce  one,  but  will,  as  a  condition  of  relief, 
hold  the  party  to  the  performance  of  that  which  is  just  and  equitable. 
The  payment  of  the  principal  sum  loaned  and  the  lawful  interest  is 
always  regarded  as  just  and  equitable.     It  is  no  more  than  the  borrower 
ought  in  conscience  to  pay,  nor  than,  in  the  absence  of  the  prohibition 
of  the  statute,  he  would  be  required  to  pay.     If  therefore  he  has  paid 
the  interest,  a  court  of  equity  will  not  aid  him  to  get  it  back  within 
the  lawful  rate,  though  the  lender  had  no  action  to  compel  its  payment. 
And  the  rule  is  the  same  in  an  action  at  law  for  money  had  and  received, 
to  recover  it  back ;   or  if  the  borrower  set  off  the  interest  money  paid 
against  the  principal  sum  in  a  legal  action  of  the  lender  to  recover 
that.     Money  had  and  received,  though  legal  in  form,  is  in  its  nature  an 
equitable  remedy,  and  lies  only  where  the   defendant  has  received 
money  which,  ex  cequo  et  bono,  he  ought  to  refund.") 

In  some  jurisdictions  where  the  borrower  is  permitted  to  set  off 
all  interest  paid  in  an  action  by  the  lender  to  recover  the  principal, 
he  will  not  be  afforded  affirmative  relief  in  equity  unless  he  first  pays 

359 


§  227]  CONSTRAINT  OF  DURESS  [Part  III 

of  excessive  interest  by  the  debtor  is  denied,  it  would  seem  that 
there  should  be  no  right  of  application  in  diminution  of  principal. 
Such  is  the  rule  in  some  jurisdictions ; *  but  in  others  the  right 
of  application  is  recognized.2  There  is  also  a  difference  of 
opinion  as  to  the  right  to  have  usurious  interest  applied  on  prin- 
cipal after  the  right  to  recover  such  interest  has  been  barred  by 
the  statute  of  limitations.  A  proper  regard  for  the  spirit  and 
purpose  of  the  statute  points  to  the  conclusion  that  the  right  of 
application  is  barred  with  the  right  of  recovery.3  In  some  cases, 
however,  it  has  been  held  otherwise.4 

§  227.  Same  :  Recovery  of  usurious  interest  under  National 
Bank  Act.  —  The  Act  of  1864,5  commonly  called  the  National 
Bank  Act,  imposes  as  a  penalty  for  the  taking  of  usurious  in- 
terest by  national  banks  the  forfeiture  of  all  interest,  and  in 

or  tenders  the  principal  and  legal  interest.  See  Sanner  v.  Smith,  1878, 
89  111.  123 ;  31  Am.  Rep.  70 ;  Eiseman  v.  Gallagher,  1888,  24  Neb. 
79 ;  37  N.  W.  941. 

1  Woolfolk  v.  Bird,  1876,  22  Minn.  341 ;   Livingston  v.  Burton,  1891, 
43  Mo.  App.  272,   (since  changed  by  statute :  see  following  note) ; 
Bank.  v.  Lutterloh,  1879,  81  N.  C.  142 ;   Quinlan  v.  Gordon,  1861,  20 
Grant's  Ch.  (U.  C.  Ont.),  Appendix  i ;   Brundage  v.   Burke,   1895,  11 
Wash.  679 ;   40  Pac.  343. 

2  Nicrosi  v.  Walker,  1903,  139  Ala.  369 ;  37  So.  97 ;  Harris  v.  Bressler, 
1887,  119  111.  467;    10  N.  E.  188;    Smith  v.  Cooper,  1859,  9  la.  376; 
Flinn  v.  Mechanics  Bldg.  Assn.,  1902,  93  Mo.  App.  444 ;  67  S.  W.  729, 
(by  statute).     In  Smith  v.  Cooper,  supra,   the   court  said  (p.  385) : 
"But  the  language  of  the  statute  is,  that  no  person  shall  directly  or 
indirectly  receive,  in  any  manner,  more  interest  than  is  therein  pre- 
scribed.    Now,  if  the  plaintiffs  recover  (with  the  amount  paid  them 
on  the  same)  the  principal  sum  included  in  the  note,  will  they  not,  by 
the  action  and  judgment  of  the  court,  receive,  not  indirectly,  but  directly, 
usurious  interest  upon  their  contract  —  the  very  contract  on  which 
they  rely  for  judgment?" 

3  Carter  v.  Carusi,  1884,  112  U.  S.  478 ;  5  S.  Ct.  281,  (Dist.  of  Col.) ; 
Carter  v.  Farthling,  1903,  115  Ky.  123;   72  S.  W.  745;    Cummings  v. 
Knight,  1889,  65  N.  H.  202;    23  Atl.  148;    Wilson  v.  Selbie,  1895, 
7  S.  D.  494 ;  64  N.  W.  537 ;  Davis  v.  Converse,  1863,  35  Vt.  503 ;  Crab- 
tree  v.  Old  Dominion,  etc.,  Assn.,  1898,  95  Va.  670 ;   29  S.  E.  741 ;   64 
Am.  St.  Rep.  818. 

4  Neale  v.  Rouse,  1892,  93  Ky.  151 ;   19  S.  W.  171,  (but  see  Carter 
v.  Farthling,  in  preceding  note) ;    Smith  v.  Mason,  1897,  (Tex.  Civ. 
App.)  39  S.  W.  188. 

8  R.  S.  §  5198. 

360 


Chap.  XV]  REFUSAL  TO   LOAN  MONEY  [§  227 

case  usurious  interest  has  actually  been  paid,  gives  to  the  bor- 
rower the  right  to  recover  back  twice  the  amount  of  interest 
thus  paid  from  the  association  taking  or  receiving  the  same; 
provided,  that  such  action  is  commenced  within  two  years  from 
the  time  the  usurious  transaction  occurred. 

The  Supreme  Court  of  the  United  States  has  held  not  only 
that  the  remedy  provided  the  borrower  by  the  statute  is  ex- 
clusive, but  that  in  an  action  by  a  bank  to  collect  the  principal 
debt  the  borrower  cannot  set  up  by  way  of  counterclaim  or 
set-off  that  the  bank  has  received  usurious  interest.1 

1  Barnet  v.  Muncie  Nat.  Bank,  1878,  98  U.  S.  555.  The  rule  es- 
tablished by  the  Supreme  Court  has  been  enforced,  in  actions  by  na- 
tional banks,  by  the  State  courts.  See  Peterborough  Nat.  Bank  v. 
Childs,  1882,  133  Mass.  248 ;  43  Am.  Rep.  509  ;  Central  Nat.  Bank  v. 
Haseltine,  1900,  155  Mo.  58;  55  S.  W.  1015;  85  Am.  St.  Rep.  531, 
(of.  183  U.  S.  132  ;  22  S.  Ct.  50) ;  Nat.  Bank  v.  Lewis,  1880,  81  N.  Y. 
15 ;  Nat.  Bank  ».  Dushane,  1880,  96  Pa.  St.  340.  But  see  Wachovia 
Nat.  Bank  v.  Ireland,  1898,  122  N.  C.  571 ;  29  S.  E.  835.  See  5  Fed. 
Stat.  Anno.  133,  for  extensive  collection  of  authorities. 

The  same  rule  was  applied,  in  Caponigri  v.  Altieri,  1901,  165  N.  Y. 
255 ;  59  N.  E.  87,  to  a  case  arising  under  a  New  York  statute  similar 
to  the  National  Bank  Act. 


361 


CHAPTER  XVI 

CONSTRAINT   OF   LEGAL   PROCEEDINGS 

|  228.  (I)  Constraint  of  commencement  of  action. 

§  229.  (II)  Constraint  of  judgment : 

(1)   In  general :  Res  judicata. 

§  230.  (2)  Void  judgment. 

§  231.  (3)  Judgment  satisfied  but  not  discharged. 

§  232.  (4)  Judgment  subsequently  reversed. 

§  233.  Same :  Recovery  by  person  other  than  judgment  defendant. 

§  234.  Same :    Recovery  from  whom. 

§  235.  Same :  Measure  of  recovery. 

§  236.  Same :   Reversal  on  technical  grounds. 

§  228.  (I)  Constraint  o:  commencement  of  action.  —  It  is 
well  settled  that  money  paid  with  full  knowledge  of  the  facts 
in  satisfaction  of  a  claim  on  which  action  has  been  commenced, 
but  no  judgment  obtained,  is  not  recoverable.1  Various  reasons 
have  been  given  for  this  rule.  It  has  been  pointed  out  that 
payment  of  a  claim  under  such  circumstances  would  be  an  idle 
ceremony  if  the  only  effect  were  to  reverse  the  position  of  the 
parties  as  plaintiff  and  defendant ;  that  to  allow  recovery  would 
be  unjust  to  the  payee  since  it  would  subject  him  to  suit 
at  such  time  and  place  as  might  be  chosen  by  the  payor ;  that 
if  the  defendant  paying  in  the  first  action  could  make  that  pay- 
ment the  basis  of  a  second  action,  the  defendant  in  the  second 

1  Hamlet  v.  Richardson,  1833,  9  Bing.  644 ;  Moore  v.  Vestry  of 
Fulham,  [1895]  1  Q.  B.  399 ;  Watson  v.  Cunningham,  1824,  1  Blackf. 
(Ind.)  321;  Benson  v.  Monroe,  1851,  7  Cush.  (Mass.)  125;  54  Am. 
Dec.  716 ;  Vereycken  v.  Vandenbrooks,  1894,  102  Mich.  119  ;  60  N.  W. 
687;  Turner  v.  Barber,  1901,  66  N.  J.  L.  496;  49  Atl.  676;  Wheatley 
v.  Waldo,  1863,  36  Vt.  237 ;  Beard  ».  Beard,  1885,  25  W.  Va.  486 ;  52 
Am.  Rep.  219.  In  Moore  v.  Vestry  of  Fulham,  supra,  relief  was  denied 
though  it  appeared  that  the  plaintiff  made  the  payment  under  a  mis- 
take of  fact  which  led  him  to  believe  that  the  demand  sued  upon  was 
just.  The  reasons  for  the  denial  of  relief  do  not  apply  to  such  a  case, 
and  the  decision  seems  unsound. 

362 


Chap.  XVI]  CONSTRAINT   OF  JUDGMENT  [§  229 

action  would  have  the  same  privilege  and  the  litigation  could 
be  made  interminable.1  A  more  fundamental  reason  would 
seem  to  be  that,  since  a  mere  resort  to  legal  process  will  not, 
under  ordinary  circumstances,  influence  the  conduct  of  a  man  of 
average  intelligence  and  will,  the  payment  is  not  regarded  as 
made  under  compulsion.2 

The  right  to  recover  money  extorted  by  duress  of  person  or  of 
goods,  whether  under  color  of  legal  process  or  otherwise,  is  else- 
where considered  (ante,  §§  214-216). 

§  229.  (II)  Constraint  of  judgment :  (1)  In  general :  Res 
judicata.  —  A  payment  made  after  the  entry  of  adverse  judg- 
ment may  be  claimed,  with  better  reason,  to  be  made  under 
compulsion.  But  so  long  as  the  judgment  remains,  another 
obstacle  to  the  recovery  of  money  collected  thereunder  is  en- 
countered in  the  doctrine  of  res  judicata: 

Harriot  v.  Hampton,  1797,  7  Term  R.  269 :  The  defendant 
formerly  brought  an  action  against  the  present  plaintiff  for  goods 
sold,  for  which  the  plaintiff  had  before  paid  and  obtained  the 
defendant's  receipt;  but  not  being  able  to  find  the  receipt  at 
that  time,  and  having  no  other  proof  of  payment,  he  could  not 
defend  the  action  but  was  obliged  to  submit  and  pay  the  money 
again,  and  he  gave  a  cognovit  for  the  costs.  The  plaintiff  after- 
wards found  the  receipt,  and  brought  this  action  for  money  had 
and  received  in  order  to  recover  back  the  amount  of  the  sum 
so  wrongfully  enforced  in  payment.  Lord  KENYON,  C.J. 
(p.  269) :  "  I  am  afraid  of  such  a  precedent.  If  this  action  could 
be  maintained  I  know  not  what  cause  of  action  could  ever  be 
at  rest.  After  a  recovery  by  process  of  law  there  must  be  an 
end  of  litigation,  otherwise  there  would  be  no  security  for  any 
person." 

Walker  v.  Ames,  1823,  2  Cow.  (N.  Y.)  428 :  On  certiorari  to 
a  Justice's  court.  The  action  was  case  in  the  court  below, 
by  Ames  against  Walker ;  "  For  that  the  defendant  did  fraud- 
ulently obtain  a  judgment,  or  a  certain  part  thereof,  against 
the  present  plaintiff,  to  his  damage  $25."  The  defendant 

1  See  Keener,  "  Quasi-Contracts,"  p.  411. 

2  Turner  v.  Barber,  1901,  66  N.  J.  L.  496 ;  49  Atl.  676 ;  Wheatley  v. 
Waldo,  1863,  36  Vt.  237. 

363 


§  229]  CONSTRAINT  OF  LEGAL  PROCEEDINGS  [Part  III 

pleaded  the  former  suit  in  bar,  which  was  overruled  by  the  Jus- 
tice. The  fraud  complained  of  was  that  Walker,  in  the  suit 
against  Ames,  recovered  on  a  book  account,  and  also  on  a  note 
given  by  Ames  to  Walker,  on  a  settlement  of  the  same  account, 
for  the  balance  thereof.  Verdict  and  judgment  for  the  plaintiff. 
Curia  (p.  429) :  "The  judgment  must  be  reversed.  This  was 
overhauling  the  first  judgment,  and  attempting  to  recover 
back  a  portion  of  it,  on  the  ground  that  it  was  not  due,  and  had 
been  unconscientiously  recovered.  .  .  .  There  would,  indeed, 
be  no  end  to  litigation,  nor  any  security  to  any  person,  if  actions 
like  this  could  be  sustained."  * 

It  has  commonly  been  thought  that  Lord  MANSFIELD,  in  the 
much  discussed  case  of  Moses  v.  Macferlan?  reached  a  contrary 
conclusion.  It  there  appeared  that  the  plaintiff  Moses  had  in- 
dorsed to  the  defendant  Macferlan  four  several  promissory 
notes  of  which  the  plaintiff  was  payee,  for  the  purpose  of  ena- 
bling the  defendant  to  recover  from  the  maker,  the  defendant 

1  Accord:  De  Medina  v.  Grove,  1846,  10  Q.  B.  152,  aff.  172; 
Trustees  of  the  University  v.  Keller,  1840,  1  Ala.  406,  (and  see 
Turlington  v.  Slaughter,  1875,  54  Ala.  195) ;  Carter  v.  First  Ecclesi- 
astical Society,  1820,  3  Conn.  455;  Hagar  v.  Springer,  1872,  60 
Me.  436;  Gordon's  Extr.  v.  Mayor  of  Baltimore,  1847,  5  Gill  (Md.) 
231;  Homer  v.  Fish,  1823,  1  Pick.  (Mass.)  435;  11  Am.  Dec.  218; 
Fuller  v.  Shattuck,  1859,  13  Gray  (Mass.)  70,  (but  see  Lazell  v. 
Miller,  1818,  15  Mass.  207) ;  People's  Savings  Bank  v.  Heath,  1900, 
175  Mass.  131 ;  55  N.  E.  807 ;  78  Am.  St.  Rep.  481 ;  Greenabaum  v. 
Elliott,  1875,  60  Mo.  25 ;  Desert  National  Bank  v.  Nuckolls,  1890,  30 
Neb.  754;  47  N.  W.  202;  Wilson  v.  Cameron,  1842,  3  N.  Bruns. 
542 ;  Tilton  v.  Gordon,  1817,  1  N.  H.  33 ;  Bink  v.  Wood,  1864,  43 
Barb.  (N.  Y.  Sup.  Ct.)  315;  Converse  v.  Sickles,  1893,  74  Hun  429; 
26  N.  Y.  Supp.  590,  (case  reversed  on  other  grounds :  1895,  146  N.  Y. 
200,  205;  40  N.  E.  777) ;  Finklestone  v.  Lanzke,  1909,  63  Misc.  Rep. 
330;  117  N.  Y.  Supp.  183;  Federal  Ins.  Co.  v.  Robinson,  1876,  82 
Pa.  St.  357 ;  Ogle  v.  Baker,  1890,  137  Pa.  St.  378 ;  20  Atl.  998 ;  21 
Am.  St.  Rep.  886 ;  James  v.  Cavit,  1807,  2  Brev.  (S.  C.)  174 ;  Kirklan 
v.  Brown's  Admrs.,  1843,  4  Humph.  (23  Tenn.)  174;  40  Am.  Dec. 
635;  Corey  v.  Gale,  1841,  13  Vt.  639.  But  see,  contra,  Clay  v.  Clay, 
1854,  13  Tex.  195.  In  Ward  &  Co.  v.  Wallis,  [1900]  1  Q.  B.  675,  678, 
it  is  said  that  the  rule  does  not  apply  where  the  person  securing  the 
judgment  is  guilty  of  bad  faith.  But  see,  contra,  Walker  v.  Ames, 
quoted  in  the  text. 

2 1760,  2  Burr.  1005,  1008-9. 

364 


Chap.  XVI]  CONSTRAINT   OF   JUDGMENT  [§  229 

agreeing  to  indemnify  the  plaintiff  against  liability  because  of 
such  indorsement.  Notwithstanding  the  agreement  of  indem- 
nity, the  defendant  Macferlan  sued  the  plaintiff  Moses  in  the 
Court  of  Conscience,  as  indorser  of  the  notes.  The  plaintiff 
set  up  the  agreement  of  indemnity  as  a  defense,  but  the  court, 
"  thinking  they  had  no  power  to  judge  of  it,"  gave  judgment 
for  the  present  defendant.  The  plaintiff  thereupon  paid  the 
judgment,  and  brought  this  action  in  the  King's  Bench  to  re- 
cover the  money  so  paid.  The  court  held  that  he  might 
recover. 

Lord  MANSFIELD  :  "Many  other  objections,  besides  that 
which  arose  at  the  trial,  have  since  been  made  as  to  the 
propriety  of  this  action  in  the  present  case.  .  .  .  3d.  Objec- 
tion. Where  money  has  been  recovered  by  the  judgment  of  a 
court  having  competent  jurisdiction,  the  matter  can  never  be 
brought  over  again  by  a  new  action.  Answer.  It  is  most 
clear  'that  the  merits  of  a  judgment  can  never  be  over-haled 
by  an  original  suit,  either  at  law  or  in  equity.'  Till  the  judg- 
ment is  set  aside  or  reversed,  it  is  conclusive,  as  to  the  subject 
matter  of  it,  to  all  intents  and  purposes.  But  the  ground  of 
this  action  is  consistent  with  the  judgment  of  the  Court  of 
Conscience;  it  admits  the  commissioners  did  right.  They 
decreed  upon  the  indorsement  of  the  notes  by  the  plaintiff : 
which  indorsement  is  not  now  disputed.  The  ground  upon 
which  this  action  proceeds,  was  no  defence  against  that  sen- 
tence. It  is  enough  for  us,  that  the  commissioners  adjudged 
'they  had  no  cognizance  of  such  collateral  matter.'  We 
cannot  correct  an  error  in  their  proceedings;  and  ought  to 
suppose  what  is  done  by  a  final  jurisdiction,  to  be  right. 
But  we  think  'the  commissioners  did  right,  in  refusing  to  go 
into  such  collateral  matter.'  .  .  .  The  ground  of  this  action  is 
not,  'that  the  judgment  was  wrong,'  but,  'that,  (for  a  reason 
which  the  now  plaintiff  could  not  avail  himself  of  against  that 
judgment),  the  defendant  ought  not  in  justice  to  keep  the 
money.'  And  at  Guildhall,  I  declared  very  particularly,  'that 
the  merits  of  a  question  determined  by  the  commissioners, 
where  they  had  jurisdiction,  never  could  be  brought  over  again 
in  any  shape  whatever. '"" 

365 


§  229]  CONSTRAINT  OF   LEGAL  PROCEEDINGS  [Part  III 

This  decision  has  been  severely  criticized  and  is  often  declared 
to  have  been  overruled,  in  effect,  by  Harriot  v.  Hampton,  supra, 
and  subsequent  cases: 

Carter  v.  First  Ecclesiastical  Society,  1820,  3  Conn.  455 : 
PETERS,  J.  (p.  461) :  "To  entitle  the  plaintiff  to  a  verdict,  the 
case  of  Moses  v.  Macferlan,  2  Burr.  1005,  must  be  revived. 
But  the  authority  of  that  case  has  been  too  often  shaken,  to 
have  any  weight  at  the  present  day.  Though  the  principles, 
relating  to  indebitatus  assumpsit,  so  luminously  illustrated  in 
Moses  v.  Macferlan,  have  been  universally  recognized,  their 
application  to  that  case  has  been  generally  reprobated,  by  the 
Bench  as  well  as  the  Bar.  In  that  case,  money  obtained  from 
the  plaintiff,  pursuant  to  a  judgment  of  a  court,  then  in  force, 
was  recovered  back,  on  proof  of  facts  dehors  the  record,  whereby 
it  appeared,  that  the  defendant,  ex  cequo  et  bono  ought  not  to 
retain  it.  This  has  been  considered  as  an  over-haling  or  im- 
peaching of  a  judgment,  indirectly.  But  Lord  Mansfield  him- 
self, in  that  very  case,  informs  us,  'that  the  merits  of  a  judg- 
ment cannot  be  over-haled,  by  an  original  suit,  either  at  law,  or 
in  equity.  Till  the  judgment  is  set  aside,  or  reversed,  it  is  con- 
clusive, as  to  the  subject  matter  of  it,  to  all  intents  and  purposes,' 
p.  1009.  How,  then,  could  it  be  against  conscience  for  Mac- 
ferlan to  retain  this  money,  thus  awarded  him,  by  a  court  of 
justice,  merely  because  he  had  violated  his  agreement,  for  which 
he  was  liable  in  damages,  but  not  to  refund  the  money  he  had 
recovered.  Well  might  he  have  said,  '  Non  in  hcec  feeder  a  veni.' " 

Kirklan  &  Hickson  v.  Brown's  Admrs.,  1853,  4  Humph.  (23 
Tenn.)  174;  40  Am.  Dec.  635:  REESE,  J.  (p.  175):  "In  the 
great  case  of  Moses  v.  Macferlan,  2  Burr.  1005,  the  ex  csquo  et 
bono  principle  of  the  action  of  assumpsit,  announced  by  Lord 
Mansfield,  as  well  as  the  facts  and  circumstances  of  the  case, 
might  seem  to  give  some  ground  for  the  maintamance  of  a 
suit  like  this.  But  of  that  case,  as  well  as  of  some  others  de- 
termined by  Lord  Mansfield,  it  may  be  said,  materiam  superamt 
opus.  The  great  principles  marked  out  and  developed  by  his 
original  and  powerful  intellect  remain  to  guide  us;  but  their 
framework,  the  facts  and  circumstances  to  which  they  were 
appended,  not  always  appropriate,  have  in  some  instances 
given  way  and  ceased  to  sustain  them." 

366 


Chap.  XVI]  CONSTRAINT   OF   JUDGMENT  [§  229 

It  has  been  contended,  however,  that  the  case  is  distinguish- 
able from  those  with  which  it  is  supposed  to  be  in  conflict,  in 
that  the  subject  matter  of  the  action,  although  offered  as  a  de- 
fense in  the  suit  against  the  plaintiff  in  the  Court  of  Conscience, 
was  not  passed  upon  by  that  court  because  of  want  of  juris- 
diction.1 Certainly,  Lord  MANSFIELD  himself  did  not  regard 
his  decision  as  an  overhauling  of  the  judgment  of  the  Court  of 
Conscience.  He  expressly  declares  that  "  the  merits  of  a  judg- 
ment can  never  be  over-haled  by  an  original  suit,  either  at  law 
or  in  equity."  But  since  the  theory  of  the  action  in  the  King's 
Bench  was  the  recovery  of  the  money  paid  under  the  judgment  of 
the  Court  of  Conscience  upon  the  ground  that  the  payment  of 
such  judgment  unjustly  enriched  the  defendant,  a  decision  allow- 
ing such  recovery  would  seem  to  have  the  effect,  at  least,  of 
overhauling  the  former  judgment.  It  is  true  that  Lord  MANS- 
FIELD did  not  hold  the  former  judgment  "  wrong,"  i.e.  based 
upon  an  erroneous  conclusion  from  the  facts  which  the  Court  of 
Conscience  was  able  to  consider,  but  if  that  be  a  valid  distinc- 
tion, might  not  Lord  KENYON  have  held  in  Marriott  v.  Hampton, 
that  while  the  court  which  entered  the  former  judgment  un- 
doubtedly reached  a  sound  conclusion  from  the  facts  then  in  its 
possession,  the  subsequent  discovery  of  the  receipt  by  the  plain- 
tiff convinced  him  that  the  payment  of  the  former  judgment  had 
unjustly  enriched  the  defendant  and  that  a  recovery  in  quasi 
contract  should  therefore  be  allowed? 

In  regard  to  Moses  v.  Macferlan  it  may  be  added  that  Mac- 
ferlan  obviously  committed  a  breach  of  contract  in  suing  Moses 
on  his  indorsement,  and  that  Moses  might  have  maintained 
special  assumpsit  for  the  damages  resulting  from  such  breach. 
If  the  theory  of  Moses'  action  had  been  the  recovery  of  such 
damages  rather  than  the  recovery  of  money  paid  under  con- 


1<(In  Moses  v.  Macferlan,  it  was  decided  that  a  defendant  who  is 
unable  to  avail  himself  of  certain  matter  because  the  court  in  which 
the  action  is  brought  cannot  entertain  the  defense  for  want  of  juris- 
diction, is  not  precluded  by  the  payment  of  a  judgment  therein  from 
making  such  matter  the  basis  of  an  action  for  recovery  of  the  money 
so  paid."  —  Keener,  "  Quasi-Contracts,"  p.  413. 

367 


§  230]  CONSTRAINT  OF  LEGAL  PROCEEDINGS  [Part  III 

straint  of  a  judgment,  there  would  appear  to  have  been  no  valid 
objection  to  a  decision  in  his  favor.1 

§  230.  (2)  Void  judgment.  —  If  a  judgment  is  not  merely 
erroneous  but  void  —  as  for  want  of  jurisdiction  —  it  is  of  course 
totally  without  legal  effect.  And  since  nothing  is  determined  by 
it,  the  doctrine  of  res  judicata  is  no  obstacle  to  the  recovery  of 
money  collected  thereunder.2  Payment  must  have  been  made 
under  compulsion,  however,  and  it  has  been  held  that  money 
paid  in  satisfaction  of  a  void  judgment  upon  which  execution 
had  not  been  issued  may  not  be  recovered.3 

§  231.  (3)  Judgment  satisfied  but  not  discharged.  —  Money 
collected  by  means  of  an  execution  issued  upon  a  judgment 
which  has  been  paid  but  not  discharged  of  record  may  be 
recovered,  since  the  overhauling  of  the  judgment  is  not  in- 
volved.4 So  also  where  money  is  paid  but  not  credited  on  a 
judgment  and  the  whole  amount  of  the  judgment  is  subse- 
quently collected  by  levy  and  sale,  the  excess  must  be  repaid 
to  the  judgment  debtor.5 

§  232.  (4)  Judgment  subsequently  reversed.  —  An  action  to 
recover  money  paid  upon  a  judgment  subsequently  reversed 
is  not  open  to  the  objection  that  it  is  an  attempt  to  overhaul  a 
prior  judgment.  The  sole  question  is :  was  the  payment  made 
under  compulsion?  If  execution  had  issued  before  payment 
was  made,  the  answer,  it  is  agreed,  must  be  in  the  affirma- 

1  See  Keener,  "Quasi-Con tracts,"  p.  415. 

2Newdigate  v.  Davy,  1692-93,  1  Ld.  Raym.  742;  Farrow  v. 
Mayes,  1852,  18  Q.  B.  516 ;  Hollingsworth  v.  Stone,  1883,  90  Ind.  244 ; 
Murray  t;.  Moorer,  1840,  Cheves  (S.  C.)  111.  Contra:  Bailey  v.  Buell, 
1872,  50  N.  Y.  662,  (but  see  Trimmer  v.  City  of  Rochester,  1892,  130 
N.  Y.  401,  405;  29  N.  E.  746). 

3  Elston  v.  City  of  Chicago,  1866,  40  111.  514;   89  Am.  Dec.  361. 

4  Logan  v.  Sumter,  1859,  28  Ga.  242 ;    73  Am.  Dec.  755 ;    Field  v. 
Yeaman,  1907,  31  Ky.  Law  Rep.  12 ;    101  S.  W.  368 ;    Davis  v.  Gott, 
1908,  130  Ky.  486;    113  S.  W.  826;    Pope  ».  Benster,  1894,  42  Neb. 
304 ;   60  N.  W.  561 ;  47  Am.  St.  Rep.  703 ;   Wisner  v.  Buckley,  1836, 
15  Wend.    (N.    Y.)   321.      And   see    Ewing  v.   Peck,    1855,   26  Ala. 
413. 

8  Catterlin  v.  Somerville,  1864,  22  Ind.  482 ;  Hale  v.  Passmore,  1836, 
4  Dana  (34  Ky.)  70 ;  Cocke  v.  Porter's  Extrs.,  1840,  2  Humph.  (21 
Term.)  15. 

368 


Chap.  XVI]      JUDGMENT   SUBSEQUENTLY   REVERSED  [§  232 

tive.1  And  while  there  are  a  few  cases  to  the  contrary,2  the 
weight  of  authority  supports  the  view  that  a  valid  judgment 
(though  it  subsequently  proves  erroneous),  without  the  issue 
of  execution  and  without  actual  threats  to  seize  or  sell  the 
judgment  debtor's  property,  is  sufficiently  coercive  to  raise 
an  obligation,  when  the  judgment  is  reversed,  to  make  restitu- 
tion.3 

It  was  usual,  at  the  common  law,  to  incorporate  in  the  judg- 
ment of  reversal  a  direction  that  the  appellant  "  be  restored 
to  all  things  which  he  has  lost  on  occasion  of  the  judgment 
aforesaid."  Pursuant  to  such  direction  a  writ  of  restitution 
issued,  or  in  case  the  amount  paid  by  the  appellant  did  not 
appear  of  record,  process  in  the  nature  of  an  order  to  show 
cause,  known  as  a  scire  facias  quare  restitutionem  habere  non 
debit.  In  some  States  a  similar  remedy  has  been  provided  by 

1  Dupuy  v.  Roebuck,  1845,  7  Ala.  484 ;    Ewing  v.  Peck,  1855,  26 
Ala.  413 ;    Raum  v.  Reynolds,  1861,  18  Cal.  275 ;    Hosmer  v.  Barret, 
1794,  2  Root  (Conn.)  156;    Martin  v.  Woodruff,  1850,  2  Ind.  237; 
Keehn  v.  McGillicuddy,  1898, 19  Ind.  App.  427  ;  49N.E.  609;  Chicago, 
etc.,  R.  Co.  v.  Adams,  1901,  26  Ind.  App.  443  ;  59  N.  E.  1087 ;   Stevens 
v.  Fitch,  1846,  11  Mete.  (Mass.)  248;    Clark  v.  Pinney,  1826,  6  Cow. 
(N.  Y.)  298 ;   Sturges  ».  Allis,  1833,  10  Wend.  (N.  Y.)  354,  (In  this  case 
a  new  trial  had  been  ordered  and  the  original  suit  was  still  pending : 
but  see  People  v.  Cornell,  1909,  65  Misc.  Rep.  452 ;    121  N.  Y.  Supp. 
972,  where  the  restitution  of  a  fine  was  refused  after  reversal  of  con- 
viction and  order  of  new  trial,  appeal  having  been  taken  to  the  Court 
of  Appeals  on  the  judgment  reversing  conviction.) ;   Haebler  v.  Myers, 
1892,  132  N.  Y.  363  ;   30  N.  E.  963  ;    15  L.  R.  A.  588  ;   28  Am.  St.  Rep. 
589 ;   Metschan  ».  Grant  County,  1899,  36  Or.  117  ;   58  Pac.  80 ;   Trav- 
ellers' Ins.  Co.  v.  Heath,    1880,   95   Pa.  St.  333.     See  United  States 
Bank  v.  Bank  of  Washington,  1832,  6  Pet.  (U.  S.)  8;   Duncan  v.  Kirk- 
patrick,  1825,  13  Serg.  &  R.  (Pa.)  292 ;  Beard  v.  Beard,  1885,  25  W.  Va. 
486;    52  Am.  Rep.  219.     But  see,  contra,  Gould  v.  McFall,  1888,  118 
Pa.  St.  455 ;   12  Atl.  336 ;   4  Am.  St.  Rep.  606. 

2  Winston  v.  Nunez,   1873,  25  La.  Ann.  476;    Ritchie  v.  Carter, 
1901,  89  Mo.  App.  290,  (but  see  Campbell  v.  Kauffman  Milling  Co., 
1907,  127  Mo.  App.  287 ;    105  S.  W.  286). 

3  Glover  v.  Foote,  1844,  7  Blackf.  (Ind.)  293  ;  Campbell  v.  Kauffman 
Milling  Co.,  1907,  127  Mo.  App.  287 ;  105  S.  W.  286 ;   Lott  v.  Swezey, 
1859,  29  Barb.  (N.Y.)  87;  Scholey  v.  Halsey,  1878,  72  N.  Y.  578,  (but 
see  Third  Ave.  R.  Co.  v.  Klinker,  1899,  29  Civ.  Proc.  Rep.  51 ;  58  N.  Y. 
Supp.  136) ;    Chapman  v.  Sutton,  1887,  68  Wis.  657 ;    32  N.  W.  683. 
See  Hipp,  v  Crenshaw,  1884,  64  la.  404 ;  20  N.  W.  492. 

369 


§  233]  CONSTRAINT  OF  LEGAL  PROCEEDINGS  [Part  III 

statute.1  Neither  the  "  antiquated  remedy  by  scire  facias," 
however,  nor  a  statutory  substitute  therefor,  is  exclusive  of 
the  appellant's  right  to  enforce  restitution  in  a  separate  action,2 
although  it  has  been  held  that  where  an  order  of  restitution  is 
incorporated  in  the  judgment,  assumpsit  will  not  lie  "  because 
the  plaintiff  would  otherwise  be  permitted  to  turn  his  judgment 
into  a  simple-contract  debt."  3 

§  233.  Same  :  Recovery  by  person  other  than  the  judgment 
defendant.  —  One  who,  as  the  real  party  in  interest,  pays  a 
judgment  which  is  subsequently  reversed,  may  recover  the 
amount  paid  though  not  a  defendant  of  record  in  the  first 
action.4  In  like  manner,  it  seems,  a  surety  who  pays  a  judg- 
ment against  his  principal  may  upon  reversal  enforce  restitu- 
tion ; 5  although  there  are  cases  holding,  on  the  contrary,  that 
the  surety  must  look  to  his  principal.6  Since  payment  by  a 
garnishee  discharges  his  obligation  to  the  defendant  in  the 
principal  action,  the  subsequent  reversal  of  the  judgment  en- 
titles such  defendant,  and  not  the  garnishee,  to  enforce  res- 
titution.7 

§  234.  Same :  Recovery  from  whom.  —  Money  paid  in  satis- 
faction of  a  judgment  subsequently  reversed  may  be  recovered 
from  the  judgment  creditor,  or,  in  case  he  was  but  a  nominal 
plaintiff,  from  the  person  in  whose  interest  the  action  was 

1  See  Haebler  v.  Myers,  1892,  132  N.  Y.  363,  367 ;  30  N.  E.  963 ; 
15  L.  R.  A.  588 ;  28  Am.  St.  Rep.  589. 

2  Clark  v.  Pinney,  1826,  6  Cow.  (N.  Y.)  298 ;  Haebler  v.  Myers, 
1892,  132  N.  Y.  363 ;  30  N.  E.  963 ;  15  L.  R.  A.  588 ;  28  Am.  St.  Rep. 
589. 

J  Duncan  v.  Kirkpatrick,  1825,  13  Serg.  &  R.  (Pa.)  292. 

4  Stevens  v.  Fitch,  1846,  11   Mete.  (Mass.)  248;    Mann  v.  JEtna, 
Ins.  Co.,  1875,  38  Wis.  114. 

5  Williams  v.  Simmons,  1853,  22  Ala.  425;    Kalmbach  v.  Foote, 
1890,  79  Mich.  236 ;   44  N.  W.  603. 

6  Ritchie  v.  Carter,  1901,  89  Mo.  App.  290;   Garr  v.  Martin,  1859, 
20  N.  Y.  306. 

7  Lewis  v.  Chicago,  etc.,  R.   Co.,   1897,  97  Wis.  368;  72  N.  W. 
976.  And  see  Duncan  v.  Ware's   Extrs.,   1833,  5  Stew.  &  P.   (Ala.) 
119;  24  Am.  Dec.  772;   McElwee  v.  Wilce,  1898,  80  111.  App.  338. 
But  see  First  Nat.  Bank  v.  Millon,    1881,  45  Mich.  413 ;  8  N.  W. 
80. 

370 


Chap.  XVI]      JUDGMENT   SUBSEQUENTLY   REVERSED  [§  235 

brought ; l  but  persons  to  whom  the  judgment  creditor  has 
paid  over  the  money  in  discharge  of  his  debts  are  not  liable.2 
It  has  been  said  that  an  action  will  lie  against  the  attorney  for 
the  judgment  creditor  in  case  he  receives  and  retains  the  money 
on  behalf  of  his  client,3  but  this  is  doubtful.4  Certainly,  if 
the  attorney  or  other  agent  to  whom  the  money  is  paid  retains  it, 
with  the  consent  of  his  principal,  in  satisfaction  of  a  debt  owing 
from  such  principal,  or  otherwise  applies  it  in  accordance  with 
the  principal's  directions,  he  cannot  be  held.5 

Whoever  is  sued,  it  must  appear  that  the  money  was  actually 
received  by  him  or  by  his  agent.6  Proof  that  the  money  sought 
to  be  recovered  was  paid  to  the  sheriff  is  not  enough. 

§  235.  Same  :  Measure  of  recovery.  —  Since  a  judgment, 
though  erroneous,  is  valid  and  binding  until  it  is  reversed,  the 
judgment  creditor  commits  no  wrong  in  proceeding  to  enforce 
it.  In  case  of  a  subsequent  reversal,  therefore,  he  should  not 
be  held  liable  for  damages  resulting  from  its  enforcement.7 
The  extent  of  his  obligation  is  to  restore  that  which  he  realized 
from  its  enforcement.  Where  the  judgment  is  satisfied  by 


1  Maghee  v.  Kellogg,  1840,  24  Wend.  (N.  Y.)  32 ;  Langley  i;.  Warner, 
1850,  3  N.  Y.  327 ;  Catlin  v.  Allen,  1845,  17  Vt.  158.     But  see   Little 
v.  Bunce,  1835,  7  N.  H.  485 ;  28  Am.  Dec.  363. 

2  Florida,  etc.,  R.  Co.  v.  Bisbee,  1881,  18  Fla.  60 ;  Fidelity  Trust,  etc., 
Co.  v.  Louisville   Banking  Co.,  1900,  119  Ky.  675;    58   S.  W.  712; 
Dennett  v.  Nevers,  1831,  7  Me.  399. 

3  Catlin  ».  Allen,  1845,  17  Vt.  158.     And  see  Ex  parte  Morris  & 
Johnson,  1869,  9  Wall.  (U.  S.)  605. 

4  Wright  v.  Aldrich,  1880,  60  N.  H.  161 ;  Green  v.  Brengle,  1888,  84 
Va.  913 ;  6  S.  E.  603. 

5  Bank  of  the  United  States  v.  Bank  of  Washington,  1832,  6  Pet. 
(U.  S.)  8 ;  McDonald  v.  Napier,  1853,  14  Ga.  89 ;   Wright  v.  Aldrich, 
1880,  60  N.  H.  161 ;   Langley  v.  Warner,  1850,  3  N.  Y.  327 ;  Butcher  v. 
Henning,  1895,  90  Hun  (N.  Y.  Sup.  Ct.)  565 ;  35  N.  Y.  Supp.  1006. 
But  see  Penhallow  v.  Doane,  1795,  3  Dall.  (U.  S.)  54. 

6  Balls  v.  Haines,  1852,  3  Ind.  461 ;  Peck  v.  McLean,  1886,  36  Minn. 
228 ;  30  N.  W.  759 ;  1  Am.  St.  Rep.  665 ;  Isom  v.  Johns,  1811,  2  Munf. 
(Va.)  272 ;   Eubank  v.  Rail's  Extr.,  1833,  4  Leigh  (Va.)  308.     And  see 
Catlin  v.  Allen,  1845,  17  Vt.  158. 

7  Bridges  v.  McAlister,  1899,  106  Ky.  791 ;  51  S.  W.  603  ;  45  L.  R.  A. 
800;    90  Am.  St.  Rep.  267.     But  see  Reynolds  ».  Hosmer,  1873,  45 
Cal.  616. 

371 


§  235]  CONSTRAINT  OF   LEGAL  PROCEEDINGS  [Part  III 

the  payment  of  money  to  the  creditor,  the  measure  of  recovery 
obviously  is  the  amount  paid.  Where  property,  instead  of 
money,  is  taken  by  the  creditor,  he  should  restore  the  value 
of  the  property  at  the  time  of  its  receipt.  Where  property  of 
the  debtor  is  sold  upon  execution  and  the  proceeds  paid  to 
the  creditor,  the  measure  of  recovery,  upon  principle  and  by 
the  weight  of  authority,  is  the  amount  actually  realized  by  the 
creditor,  and  not  the  value  of  the  property  at  the  time  of 
sale.1  In  the  cases  to  the  contrary,2  it  is  pointed  out  that  if  the 
property  were  sold  for  less  than  its  value  it  would  be  a  serious 
hardship  to  allow  the  judgment  debtor  to  recover  only  the 
proceeds  of  the  sale.  But  there  seems  to  be  no  sufficient 
reason  for  shifting  the  hardship  to  the  shoulders  of  the  judgment 
creditor,  who  is  benefited  only  to  the  extent  of  the  proceeds  of 
the  sale. 

The  obligation  to  make  restitution  arises  when  the  judgment 
is  reversed,  and  interest  from  that  date  should  be  allowed.3 

Where  property  is  sold  in  execution  of  a  judgment  that  is 
void  and  not  merely  erroneous,  the  judgment  creditor  is  a 
wrongdoer,  and  may  be  required,  at  the  election  of  the  owner, 
either  to  pay  over  the  proceeds  of  the  sale  with  interest  from 
the  time  of  receipt  or  to  compensate  him  in  damages  for  the 
loss  of  the  property.  And  if  the  latter  remedy  is  chosen,  the 
measure  of  damages  is  the  value  of  the  property  at  the  time 
of  the  sale.4 

1  Bridges  v.  McAlister,  1899, 106  Ky.  791 ;  51  S.  W.  603 ;  45  L.  R.  A. 
800;  90  Am.  St.  Rep.  267;   Schnabel  v.  Waggener,  1904,  118  Ky.  362; 
80  S.  W.  1125;    (but  see  Maynard  v.  May,  1894,  16  Ky.  Law  Rep. 
690 ;  25  S.  W.  879) ;  Bryant  v.  Fairfield,  1863,  51  Me.  149, 154,  (semble) ; 
Peck  v.  McLean,  1886,  36  Minn.  228 ;   30  N.  W.  759 ;    1  Am.  St.  Rep. 
665 ;  Gay  v.  Smith,  1859,  38  N.  H.  171 ;  Bickerstaff  v.  Bellinger,  1809, 
1  Murph.  (5  N.  C.)  272. 

2  Western   v.   Creswick,   1693-94,   4   Mod.    161;    Hays   v.   Cassell, 
1873,  70  111.  669 ;    Smith  v.  Zent,  1882,  83  Ind.  86 ;   43  Am.  Rep.  61 ; 
Thompson  v.  Thompson,  1793,  1  N.  J.  L.  159;    Cleveland  v.  Tufts, 
1888,  69  Tex.  580 ;   7  S.  W.  72. 

3  Florence  Cotton,  etc.,  Co.  v.  Louisville  Banking  Co.,  1903, 138  Ala. 
588 ;  36  So.  456 ;    100  Am.  St.  Rep.  50. 

4  Duff  &  Repp  Furniture  Co.  v.  Read,  1906,  74  Kan.  730 ;   88  Pac. 
263. 

372 


Chap.  XVI]      JUDGMENT   SUBSEQUENTLY   REVERSED  [§  236 

§  236.  Same :  Reversal  on  technical  grounds.  —  Since  it 
is  essential  to  quasi  contractual  obligation  that  the  defendant 
shall  have  received  a  benefit  the  retention  of  which  is  unjust, 
it  would  seem  that  the  reversal  of  a  judgment  upon  technical 
grounds  not  affecting  the  merits  of  the  issue  between  the  parties 
is  not  enough  to  entitle  the  appellant  to  recover,  unless  sup- 
ported by  positive  evidence  that  the  retention  of  the  money 
collected  by  the  respondent  would  be  unjust.  As  was  said 
in  an  early  Maryland  case,1  "  The  plaintiff  cannot  recover  in 
this  case,  unless  the  defendant's  retaining  the  money  is  con- 
trary to  equity  and  right.  The  defendant  may  resort  to  any 
equitable  or  conscientious  defense  to  repel  the  claim  of  the 
plaintiff  and  may  show  the  justice  of  his  original  claim."2 
In  a  number  of  cases,  however,  it  is  held  that  a  successful 
appellant  is  entitled  to  restitution,  whether  the  reversal  affects 
the  merits  or  not,  and  that  the  justice  of  the  claim  under  which 
the  money  was  collected  is  no  defense  to  an  action  for  its  re- 
covery.3 

Assuming  that  the  respondent  may  justify  his  retention  of 
the  money  notwithstanding  the  reversal  of  his  judgment,  he 
does  not  do  so  by  showing  that  he  has  a  distinct  cause  of  action 
against  the  appellant  in  which  he  is  entitled  to  recover  as  much 
as  he  has  received  and  retains.4 

1  Green  v.  Stone,  1803,  1  Har.  &  J.  (Md.)  405,  408. 

2  Accord:   Duncan  v.  Ware's  Extrs.,  1833,  5  Stew.  &  P.  (Ala.)  119; 
24  Am.  Dec.  772;    Dupuy  v.  Roebuck,  1845,  7   Ala.   484,   (but   see 
Florence  Cotton,  etc.,  Co.  v.  Louisville  Banking  Co.,  1903,  138  Ala. 
588 ;   36  So.  456 ;    100  Am.  St.  Rep.  50) ;    Teasdale  v.  Stoller,  1896, 
133  Mo.  645 ;  34  S.  W.  873  ;  54  Am.  St.  Rep.  703  ;  Johnston  v.  Miller, 
1898,  31  Nova  Scotia  83;    Gould  v.  McFall.  1888,  118  Pa.  St.  455; 
12  Atl.  336 ;   4  Am.  St.  Rep.  606. 

3  Florence  Cotton,  etc.,  Co.  v.  Louisville  Banking  Co.,   1903,   138 
Ala.  588 ;   26  So.  456 ;    100  Am.  St.  Rep.  50 ;   Hier  v.  Anheuser-Busch 
Brewing  Assn.,  1900,  60  Neb.  320 ;   83  N.  W.  77 ;    Conover  v.  Scott, 
1830,  11  N.  J.  L.  400;  Bickett  v.  Garner,  1876,  31  Oh.  St.  28. 

4  Dupuy  v.  Roebuck,  1845,  7  Ala.  484.    And  see  First  Nat.  Bank  v. 
Price,  1902,  65  Kan.  853 ;   70  Pac.  938 ;    Morgan  v.  Hart,  1848,  9  B. 
Mon.  (48  Ky.)  79. 


373 


CHAPTER  XVII 

CONSTRAINT   OF  TAX   OR   ASSESSMENT 

§  237.     In  general :  Vacation  or  correction  of  tax  or  assessment  as  con- 
dition precedent  to  right  of  action. 

§  238.     (I)  What  constitutes  constraint  in  collection  of  tax  or  assess- 
ment: 
(1)  Duress  of  person  or  goods. 

§  239.         (2)  Sale  of  real  property  :   Cloud  on  title. 

§  240.         (3)  Incumbrance  of  property. 

§  241.         (4)  Prevention  of  recordation  of  deed. 

§  242.         (5)  Interference  with  business :   Onerous  penalties. 

§  243.     (II)  Retention  of  benefit  inequitable :   Mere  irregularities. 

§  244.     (Ill)  Necessity  of  protest :   Interest. 

§  245.     (IV)  Demand  and  notice. 

§  246.     (V)  Statutory  remedy. 

§  237.  In  general :  Vacation  or  correction  of  tax  or  assess- 
ment as  condition  precedent  to  right  of  action.  —  Analogous  to 
the  case  of  money  paid  in  satisfaction  of  a  judgment  (ante,  §  229 
et  seq.)  is  that  of  money  paid  under  a  void,  illegal,  or  excessive 
tax  or  assessment.  For  boards  of  assessors  and  other  like 
bodies  are  tribunals  of  a  quasi  judicial  character,  and  their  ad- 
judications have,  in  a  degree,  the  force  and  effect  of  a  judgment 
entered  in  a  court  of  law. 

The  method  ordinarily  employed  to  compel  payment  of  a  tax 
varies  according  to  the  character  of  the  tax  itself.  State  and 
county  taxes  on  property  are  usually  collected  by  the  summary 
seizure  and  sale  of  personalty  or  the  summary  sale  of  land, 
while  the  payment  of  a  license  or  a  franchise  tax  is  commonly 
coerced  by  the  withdrawal  of  a  privilege  or  the  exaction  of  a 
penalty.  The  obligation  to  make  restitution,  however,  is  in 
all  cases  governed  by  the  same  principle,  and  no  attempt  is 
made,  in  the  following  sections,  to  give  to  the  various  kinds  of 
taxes  separate  consideration. 

Whether  or  not  the  action  of  a  board  of  assessors  or  a  like 
body  must  be  vacated  or  corrected  before  a  suit  to  recover 
taxes  paid  may  be  brought,  depends  upon  the  nature  of  the 

374 


Chap.  XVII]  IN  GENERAL  [§  237 

defect  charged.  If  the  assessors  are  without  jurisdiction,  or 
if  the  statute  under  which  they  act  is  unconstitutional,  or  if 
it  appears  upon  the  face  of  the  proceedings  that  they  have 
failed  to  comply  with  the  requirements  of  the  statute,  it  is 
unnecessary  to  take  steps  to  set .  aside  their  action ; l  but  if 
the  assessors,  having  jurisdiction  over  the  person  and  property, 
and  acting,  so  far  as  the  record  shows,  in  compliance  with  the 
requirements  of  a  constitutional  statute,  fall  into  an  error  which 
affects  the  rights  of  a  person  assessed,  the  vacation  or  correc- 
tion of  their  action,  by  appeal  to  the  state  board  of  revision  or 
by  other  proper  proceedings  instituted  for  the  purpose,  is  a  con- 
dition precedent  to  the  right  to  sue  for  restitution.2 

One  of  the  best  statements  of  the  distinction  is  found  in 
Trimmer  v.  City  of  Rochester,3  an  action  to  recover  money 
paid  upon  an  alleged  illegal  assessment  for  street  improve- 
ments. It  appeared  that  the  taxing  officers  of  the  defendant 
had  omitted  from  the  assessment  roll  realty  benefited  by  the 
improvement,  and  for  this  error  assessments  against  the  tax- 
payers who  brought  actions  to  set  them  aside  had  been 
adjudged  illegal.  Said  the  court : 

"There  is  a  broad  distinction  between  an  assessment  which 
is  illegal  by  reason  of  the  existence  of  some  fact  outside  of  the 
record,  and  one  void  on  the  face  of  the  record,  for  the  lack  of 
jurisdiction  of  the  person  or  property,  or  by  reason  of  the  un- 
constitutionality  of  the  statute  under  which  the  assessment 
is  made.  In  the  latter  case,  if  money  is  compulsively  obtained 
it  may  be  recovered  from  the  municipality  in  an  action  at  law 

1  Powder  River  Cattle  Co.  v.  Bd.  of  Commrs.,  1891,  45  Fed.  323, 
(C.  C.  Mont.) ;  Brownlee  v.  Marion  County,  1880,  53  la.  487 ;  5  N.  W. 
610 ;   Ross  v.  Supervisors,  1885,  38  Hun  (N.  Y.)  20 :   Mutual  Life  Ins. 
Co.  v.  Mayer,  etc.,  1895,  144  N.  Y.  494,  39  N.  E.  386;   ^Etna  Ins.  Co. 
v.  Mayor,  1897,  153  N.  Y.  331 ;  47  N.  E.  593. 

2  Stanley  v.  Supervisors  of  Albany,  1886,  121  U.  S.  535 ;    7  S.  Ct. 
1234  ;  Detroit  Savings  Bank  v.  Detroit,  1897,  114  Mich.  81 ;  72  N.  W. 
14  ;  Clarke  v.  Commrs.  of  Stearns  Co.,  1896,  66  Minn.  304 ;  69  N.  W.  25  ; 
Mayor,  etc.,  of  Jersey  City  v.  Riker,  1876,  38  N.  J.  L.  225 ;    20  Am. 
Rep.  386 ;  Trimmer  v.  City  of  Rochester,  1892, 130  N.  Y.  401 ;  29  N.  E. 
746 ;  Wharton  v.  Birmingham,  1860,  37  Pa.  St.  371. 

3  1892,  130  N.  Y.  401,  405  ;  29  N.  E.  746. 

375 


§  238]  CONSTRAINT  OF  TAX  OR  ASSESSMENT          [Part  III 

brought  by  the  wronged  taxpayer.  But  in  case  money  is  col- 
lected under  an  illegal  assessment,  it  cannot  be  recovered  until 
the  assessment  is  set  aside.  .  .  .  The  rights  of  persons  from 
whom  money  is  collected  under  such  assessments  are  like  those  of 
persons  from  whom  money  is  collected  under  judgments  void ; 
for  example,  for  lack  of  jurisdiction,  and  those  which  are  re- 
versible for  error.  Money  collected  under  void  judgments 
may  be  recovered  without  first  setting  them  aside,  but  that 
collected  under  judgments  erroneously  obtained  cannot  be 
until  they  are  reversed. 

"It  is  agreed  that  the  assessment  against  the  realty  of  the 
assignor  of  the  plaintiff,  and  on  account  of  which  the  money 
sought  to  be  recovered  in  this  action  was  paid,  has  not  been  set 
aside,  nor  have  any  proceedings  or  actions  been  instituted  for 
such  purpose.  The  judgment  in  Hassen's  case  did  not  set 
aside  all  of  the  assessments  but  only  those  against  the  property 
of  the  plaintiffs  in  that  action,  and  the  assessment  against  realty 
of  the  assignor  of  the  plaintiff  was  not  affected  or  invalidated 
by  that  judgment,  and  until  it  is  set  aside  no  action  can  be 
maintained  to  recover  the  sums  paid  under  it." 

§  238.  (I)  What  constitutes  constraint  in  collection  of  tax 
or  assessment :  (1)  Duress  of  person  or  goods.  —  Precisely 
what  facts  amount  to  compulsion,  in  these  tax  cases,  is  a  ques- 
tion not  free  from  difficulty.  Actual  arrest ; l  threats  of 
immediate  arrest  by  one  who  has  apparent  authority ; 2  seizure 
and  sale  of  personal  property ; 3  or  seizure  alone ; 4  or  threats 

1  Wheeler  v.  County  of  Plumas,  1906,  149  Cal.  782 ;    87  Pac.  802 ; 
Dist.  of  Columbia  v.  Chapman,  1905,  25  App.  D.  C.  95.     But  see  Bean 
v.  Middlesboro,  1900,  22  Ky.  Law  Rep.  415 ;  57  S.  W.  478. 

2  Town  of  Magnolia  v.  Sharman,  1885,  46  Ark.  358;    Chicago  v. 
Klinkert,  1900,  94  111.  App.  524;    Douglas  ».  Kansas  City,  1898,  147 
Mo.  428 ;  48  S.  W.  851 ;  Neumann  v.  City  of  La  Crosse,  1896,  94  Wis. 
103 ;  68  N.  W.  654.     And  see  Buckley  v.  Mayor  of  N.  Y.,  1898,  30 
App.  Div.  463 ;  52  N.  Y.  Supp.  452,  (aff.  159  N.  Y.  558 ;  54  N.  E.  1089). 

3  Bailey  v.  Goshen,  1865,  32  Conn.  546 ;  Hennel  v.  Board  of  Commrs., 
1892,  132  Ind.  32 ;    31  N.  E.  462 ;    Dow  v.  First  Parish  in  Sudbury, 
1842,  5  Mete.  (Mass.)  73  ;  Newman  v.  Supervisors  of  Livingston  County, 
1871,  45  N.Y.  676;    American  Bank  v.  Mumford,  1857,  4  R.  I.  478. 
See   Guaranty  Trust  Co.  v.  City  of  New  York,  1905,  108  App.  Div. 
192 ;  95  N.  Y.  Supp.  770. 

4  Lindsey  ».  Allen,  1897,  19  R.  I.  721 ;  36  Atl.  840. 

376 


Chap.  XVII]      CONSTRAINT   IN   COLLECTION   OF   TAX 

of  immediate  seizure ; l  any  of  these  is  obviously  sufficient 
(see  ante,  §§  214,  216).  On  the  other  hand,  threats  of  a  civil 
action,2  or  of  a  criminal  prosecution,  made  under  circumstances 
which  do  not  create  a  reasonable  fear  of  immediate  arrest,* 
are  not  enough  (see  ante,  §  215).  Indeed  there  are  cases  which 
insist  that  nothing  short  of  threats  of  immediate  arrest  or 
seizure  of  goods  will  suffice.4  By  the  weight  of  authority, 

1  Dist.  of  Columbia  v.  Glass,  1906,  27  App.  D.  C.  576 ;  Howard  v. 
Augusta,  1882,  74  Me.  79;  First  Nat.  Bank.  v.  Watkins,  1870,  21 
Mich.  483 ;  Lyon  v.  Receiver  of  Taxes,  1883,  52  Mich.  271 ;  17  N.  W. 
839 ;  Dale  v.  City  of  New  York,  1902,  71  App.  Div.  227 ;  75  N.  Y. 
Supp.  576.  And  see  Hubbard  v.  Brainard,  1869,  35  Conn.  563 ;  Wood- 
mere  Cemetery  Assn.  v.  Township,  1902,  130  Mich.  466;  90  N.  W. 
277 ;  Kelley  v.  Rhodes,  1898,  7  Wyo.  237 ;  51  Pac.  593 ;  39  L.  R.  A. 
594 ;  75  Am.  St.  Rep.  904. 

2Falvey  ».  Board  of  County  Commrs.,  1899,  76  Minn.  257;  79 
N.  W.  302.  And  see  Mayor,  etc.,  of  Baltimore  v.  Lefferman,  1846,  4 
Gill  (Md.)  425 ;  45  Am.  Dec.  145. 

3  Southern  R.  Co.  v.  Mayor  of  Florence,  1904,  141  Ala.  493 ;    37 
So.  844;    Maxwell  v.  San  Louis  Obispo,  1886,  71  Cal.  466;    12  Pac. 
484;   Williams  v.  Stewart,  1902,  115  Ga.  864;   42  S.  E.  256;   Betts  ». 
Village  of  Reading,   1892,  93  Mich.  77;    52  N.  W.  940;    Claflin  v. 
McDonough,  1863,  33  Mo.  412.     But  see  Hill  v.  Dist.  of  Columbia,  1889, 
18  D.  C.  (7  Mackey)  481 ;  Harvey  v.  Town  of  Olney,  1866,  42  111.  336. 

In  Hill  v.  Dist.  of  Columbia,  supra,  the  court  said  (p.  489):  "To 
say  that  a  man  who  pays  money  must  be  held  to  have  acted  freely 
unless  he  did  it  under  pressure  of  immediate  and  urgent  necessity, 
suggests  a  high  standard  of  pluck  and  manhood,  but  in  transactions 
with  the  Government  it  is  not  a  fair  or  reasonable  test.  When  a  demand 
is  made  by  an  official,  known  to  have  at  his  back,  even  though  he  may 
not  threaten  to  use  them,  the  penalties  of  the  law,  the  individual 
citizen  does  not  stand  on  an  equal  footing  in  the  dealing." 

4  See   Raisler  ».  Mayor  of  Athens,  1880,  66  Ala.  194 ;  First  Nat. 
Bank  of  Americus  v.  The  Mayor,  1881,  69  Ga.  119 ;  45  Am.  Rep.  476 ; 
Commrs.  of  Wabaunsee  County  v.  Walker,  1871,  8  Kan.  431 ;  Mayor, 
etc.,  of  Baltimore  v.  Lefferman,  1846,  4  Gill  (Md.)  425;  45  Am.  Dec. 
145 ;    Cincinnati,  etc.,  R.  Co.  v.  Hamilton  County,  1908,  120  Term.  1 ; 
113  S.  W.  361;    Sowles  v.  Soule,  1887,  59  Vt.  131;    7  Atl.  715.     In 
Rumford  Chemical  Works  v.  Ray,  1896,  19  R.  I.  456,  459 ;    34  Atl. 
814,  MATTESON,  C.J.,  said:  "The  origin  of  the  doctrine  of  'immediate 
and  urgent'  necessity  seems  to  have  been  the  dictum  of  Lord  Kenyon 
in  Fulham  v.  Down,  6  Esp.  26,  'that  where  a  voluntary  payment  was 
made  of  an  illegal  demand,  the  party  knowing  the   demand   to  be 
illegal,  without  an  immediate  and  urgent  necessity  (or,  as  expressed 
by  Mr.  Bearcroft,  unless  to  redeem  or  preserve  your  person  or  goods), 
it  is  not  the  subject  of  an  action  for  money  had  and  received.  "I 

377 


§  238]  CONSTRAINT  OF  TAX  OR  ASSESSMENT          [Part  III 

however,  if  an  officer  to  whom  a  warrant  has  been  delivered, 
authorizing  him  to  seize  and  sell  personal  property,  or  who  has 
himself  authority  to  issue  such  a  warrant,  manifests  an  intention 
to  enforce  the  payment  of  the  tax  by  seizure  and  sale  at  any  time, 
the  owner  of  the  property  is  under  compulsion  and  may  recover 
money  paid  for  the  purpose  of  preventing  such  seizure  and  sale.1 
The  following  expressions  of  this  view  are  frequently  quoted : 

Preston  v.  City  of  Boston,  1831,  12  Pick.  (Mass.)  7 :  SHAW, 
C.  J.  (p.  14) :  "  But  the  warrant  to  a  collector,  under  our  statute 
for  the  assessment  and  collection  of  taxes,  is  in  the  nature  of 
an  execution,  running  against  the  person  and  property  of  the 
party,  upon  which  he  has  no  day  in  court,  no  opportunity  to 
plead  and  offer  proof,  and  have  a  judicial  decision  of  the  question 
of  his  liability.  Where  therefore  a  party  not  liable  to  taxation, 
is  called  on  peremptorily  to  pay  upon  such  a  warrant,  and  he 
can  save  himself  and  his  property  in  no  other  way  than  by  paying 
the  illegal  demand,  he  may  give  notice  that  he  so  pays  it  by 
duress  and  not  voluntarily,  and  by  showing  that  he  is  not  liable, 
recover  it  back,  as  money  had  and  received." 

Parcher  v.  Marathon  County,  1881,  52  Wis.  388;  9  N.  W.  23 ; 
38  Am.  Rep.  745:  LYON,  J.  (p.  392) :  "We  think  it  must  be 
held,  on  principle  and  authority,  that  the  payment  of  a  demand 
under  compulsion  of  legal  process,  such  payment  being  ac- 
companied by  a  protest  that  the  demand  is  illegal  and  that  the 
payer  intends  to  take  measures  to  recover  back  the  money 
paid,  is  not  a  voluntary  payment.  And  further,  to  constitute 
compulsion  of  legal  process  it  is  not  essential  that  the  officer 
has  seized,  or  is  immediately  about  to  seize,  the  property  of 
the  payer  by  virtue  of  his  process.  It  is  sufficient  if  the  officer 
demands  payment  by  virtue  thereof,  and  manifests  an  intention 
to  enforce  collection  by  seizure  and  sale  of  the  payer's  property 
at  any  time." 

As  to  payments  made  before  the  collecting  officer  has  actually 
evinced  an  intention  to  enforce  collection,  there  is  a  much 

1  Boston  and  Sandwich  Glass  Co.  v.  Boston,  1842,  4  Mete.  (Mass.) 
181 ;  Atwell  v.  Zeluff,  1872,  26  Mich.  118;  St.  Anthony  Elevator  Co. 
v.  Soucie,  1900,  9  N.  D.  346 ;  83  N.  W.  212 ;  50  L.  R.  A.  262 ;  Rum- 
ford  Chemical  Works  v.  Ray,  1896,  19  R.  I.  456 ;  34  Atl.  814. 

378 


Chap.  XVII]  SALE   OF   REAL   PROPERTY  [§  239 

sharper  divergence  of  judicial  opinion.1  Upon  principle  and 
by  analogy  to  the  case  of  money  paid  upon  a  judgment  (ante, 
§  229etseq.),  it  would  seem  that  if  the  collecting  officer  has  no 
discretion  in  the  matter,  but  is  required  by  law,  in  case  of  non- 
payment of  the  tax,  to  collect  the  same  by  the  seizure  and  sale 
of  property,  a  recovery  should  be  allowed.  It  is  reasonable  to 
assume  that  the  officer  will  perform  his  duty,  and  idle  to  say 
that  there  is  no  duress  until  by  overt  act  he  has  shown  his 
intention  so  to  do.  If,  on  the  other  hand,  the  collector  is 
authorized  by  law  to  proceed  either  by  summary  levy  or  by 
an  action  in  which  the  defendant  may  appear  and  contest  the 
validity  of  the  tax,  a  payment  made  before  the  officer  has  evinced 
his  election  to  proceed  summarily  should  not  be  recoverable.2 

§  239.  (2)  Sale  of  real  property :  Cloud  on  title.  —  An  actual 
or  threatened  sale  of  real  property  is  not  so  coercive  as  one  of 
personalty,  since  while  personalty  is  actually  seized  the 
possession  and  enjoyment  of  real  property  is  not  immediately 
affected.  The  purchaser  takes  subject  to  a  right  of  redemption, 
and  even  after  the  expiration  of  the  redemption  period  he  can 
obtain  possession  only  by  an  action  of  ejectment.  A  tax  sale 

1  Allowing  a  recovery:  Kansas,  etc.,  R.  Co.  v.  Commrs.,  1876,  16  Kan. 
587;  Atchison,  etc.,  R.  Co.  v.  Commrs.,  1892,  47  Kan.  722;  28  Pac. 
999 ;  In  re  Edison  Co.,  1897,  22  App.  Div.  371 ;  48  N.  Y.  Supp.  99, 
(aff.  1898,  155  N.  Y.  699;  50  N.  E.  1116) ;  AUen  v.  Burlington,  1873, 
45  Vt.  202.  And  see  Mills'  Guardian  v.  City  of  Hopkinsville,  1889, 
11  Ky.  Law  Rep.  164 ;  11  S.  W.  776 ;  Tuttle  v.  Everett,  1875,  51  Miss. 
27 ;  24  Am.  Rep.  622 ;  Bank  of  Commonwealth  v.  The  Mayor,  etc., 
of  N.  Y.,  1780,  43  N.  Y.  184.  Contra:  Railroad  Co.  v.  Commrs., 
1878,  98  U.  S.  541 ;  Raisler  v.  Mayor  of  Athens,  1880,  66  Ala.  194 ; 
City  of  Chicago  v.  Fidelity  Bank,  1882,  11  111.  App.  165;  Smith  v. 
Readfield,  1847,  27  Me.  145 ;  Wilson  v.  Pelton,  1883,  40  Oh.  St.  306 ; 
Dunnell  Mfg.  Co.  v.  Newell,  1886,  15  R.  I.  233  ;  2  Atl.  766.  See  Conley 
v.  City  of  Buffalo,  1909,  65  Misc.  Rep.  100 ;  119  N.  Y.  Supp.  87. 

In  Tennessee,  when  the  tax  books  are  in  the  hands  of  the  county 
trustee,  they  have  the  force  of  a  judgment  and  execution,  and  a  pay- 
ment made  under  protest  may  be  recovered.  Bright  v.  Halloman, 
1881,  7  Lea  (75  Tenn.)  309.  But,  though  the  tax  books  are  in  the  hands 
of  the  trustee,  if  the  taxes  are  not  yet  delinquent,  payment  is  held  not 
compulsory.  Cincinnati,  etc.,  R.  Co.  v.  Hamilton  County,  1908,  120 
Tenn.  1 ;  113  S.  W.  361. 

*  See  Dunnell  Mfg.  Co.  v.  Newell,  1886,  15  R.  I.  233 ;  2  Atl.  766. 

379 


§  239]  CONSTRAINT  OF  TAX  OR  ASSESSMENT          [Part  III 

of  realty  may,  however,  affect  its  value  by  creating  a  cloud  on 
title.  It  is  therefore  held  that  taxes  paid  to  prevent  or  remove 
a  cloud  on  title  may  be  recovered  as  paid  under  compulsion.1 

Under  what  circumstances  a  sale  for  taxes  constitutes  a 
cloud  on  title  is  not  entirely  clear.  It  is  generally  said  that  if 
the  invalidity  of  the  tax  or  assessment  appears  on  the  face  of 
the  record  —  as  for  lack  of  jurisdiction  or  by  reason  of  the 
unconstitutionality  of  a  statute  —  the  sale  does  not  constitute  a 
cloud  on  title.2  Said  the  Supreme  Court  of  California,  in 
Phelan  v.  San  Francisco : 3 

"The  payment  of  a  tax  to  prevent  a  threatened  sale  of  real 
property  is  not  compulsory,  unless  the  conveyance  by  the 
officer  will  have  the  effect  to  deprive  the  owner  of  some  defense 
to  the  tax,  or  throw  upon  him  the  burden  of  showing  its  illegality. 
If  the  officer's  want  of  authority  will  appear  upon  the  face  of 

1  GUI  v.  City  of  Oakland,  1899,  124  Cal.  335 ;  57  Pac.  150 ;  City  of 
Denver  v.  Evans,  1906,  35  Colo.  490 ;   84  Pac.  65 ;   Keehn  v.  McGilli- 
cuddy,  1898,  19  Ind.  App.  427 ;    49  N.  E.  609 ;    Whitney  v.  City  of 
Port  Huron,  1891,  88  Mich.  268  ;  50  N.  W.  316 ;  26  Am.  St.  Rep.  291  ; 
Amer.  Bapt.  Miss.  Union  v.  Hastings,  1897,  67  Minn.  303 ;  69  N.  W. 
1078 ;    Peyser  v.  Mayor  of  New  York,  1877,  70  N.  Y.  497 ;   26  Am. 
Rep.   624;    Vaughn   v.   Village   of   Port   Chester,    1892,    135   N.    Y. 
460;   32  N.  E.  137;    Galveston  Gas  Co.  v.  Galveston,  1881,  54  Tex. 
287 ;    Montgomery  v.  Cowlitz  County,  1896,  14  Wash.  230 ;    44  Pac. 
259.     Contra:  Lamborn  v.  County  Commrs.,  1877,  97  U.  S.  181,  (ad- 
ministering law  of  Kansas) ;  Falls  v.  City  of  Cairo,  1871,  58  111.  403. 

In  Gill  v.  City  of  Oakland,  supra,  it  was  said  that  although  the 
plaintiff  might  have  obtained  an  injunction  against  the  sale  of  his 
property,  he  also  had  the  right  to  pay  under  protest  and  then  to  bring 
an  action  at  law  to  recover  the  amount  paid.  But  in  Hoke  v.  City  of 
Atlanta,  1899,  107  Ga.  416;  33  S.  E.  412,  restitution  was  denied  on 
the  ground  that  at  the  time  the  payment  was  made  proceedings  to 
enjoin  the  collection  of  the  tax  had  been  instituted,  in  which  the  plain- 
tiff might  have  joined. 

2  San  Francisco,  etc.,  R.  Co.  v.  Dinwiddie,  1882,  8  Saw.  312 ;   13  Fed. 
789,  (administering  law  of  California) ;   Phelan  v.  San  Francisco,  1898, 
120  Cal.  1 ;  52  Pac.  38 ;  Murphy  v.  City  of  Wilmington,  1880,  6  Houst. 
(Del.)  108;    22  Am.  St.  Rep.  345;    Sears  v.  Marshall  County,  1882, 
59  la.  603 ;    13  N.  W.  755 ;    Detroit  v.  Martin,  1876,  34  Mich.  170 ; 
22  Am.  Rep.  512 ;    Shane  v.  St.  Paul,  1880,  26  Minn.  543 ;    6  N.  W. 
349 ;   Fleetwood  v.  City  of  New  York,  1849,  2  Sandf.  (N.  Y.  Superior 
Ct.)  475. 

3 1898,  120  Cal.  1,5;  52  Pac.  38. 

380 


Chap.  XVII]  SALE   OF   REAL   PROPERTY  [§  239 

the  deed,  or  if  the  illegality  of  the  proceedings  will  necessarily 
appear  in  any  attempt  by  the  purchaser  to  disturb  the  owner 
in  the  possession  of  the  land,  a  payment  to  prevent  such  sale  is 
not  made  under  duress." 

But  if  this  test  is  adopted,  the  rule  that  the  plaintiff  can 
recover  only  when  the  sale  creates  a  cloud  on  title  would  seem 
to  be  too  narrow,  since  the  market  value  of  property  may  be 
seriously  affected  by  a  sale  that  does  not  constitute  a  technical 
"  cloud."  This  is  recognized  in  the  Michigan  case  of  Whitney 
v.  Port  Huron,1  in  which,  referring  to  the  statement  in  a  previous 
case  that  a  sale  of  land  for  the  non-payment  of  an  assessment  laid 
under  a  statute  which  is  unconstitutional  and  void  would  not 
create  a  cloud  upon  the  owner's  title,  the  court  said : 

"  This  may  be  good  law  when  applied  to  proceedings  under 
an  unconstitutional  enactment,  which  is  no  law,  and  is  held  to 
confer  no  rights  upon  any  one,  as  all  must  be  presumed  to 
know  that  it  is  unconstitutional  and  void ;  but  it  cannot  be 
applied  to  cases  where  the  statute  under  which  the  proceedings 
to  levy  the  tax  are  taken  is  constitutional,  and  where  the  ille- 
gality of  the  tax  is  claimed  from  irregularities  or  defects  in 
the  statutory  proceedings.  If  it  were  so,  it  would  require  of 
the  landowner  a  greater  knowledge  of  the  law  than  attorneys,  or 
even  courts,  possess.  For  instance,  in  the  present  case,  able 
attorneys  for  the  defendant  are  claiming  that  the  tax  paid  by 
the  plaintiff  was  a  legal  one,  and  that  all  the  proceedings  in 
assessing  it  were  lawful ;  yet  at  the  same  time  they  argue  that, 
if  it  should  be  determined  by  this  Court  to  be  illegal  for  any 
reason,  then  the  plaintiff's  payment  must  be  considered  a 
voluntary  one,  and  she  cannot  recover  what  she  has  paid,  be- 
cause she  and  every  one  else  are  presumed  to  know  that  the  tax 
is  void,  and  that  a  sale  under  it  could  convey  no  title,  and  there- 
fore cast  no  cloud  over  her  title.  But  the  fact  remains,  as  every 
one  knows,  that  a  tax  deed  or  any  other  purported  conveyance 
of  land  does  cloud  the  title,  and  that  it  can  never  be  sold  or  ex- 
changed as  readily,  and  seldom  for  as  great  a  price,  as  when  un- 

1  1891,  88  Mich.  268,  271 ;  50  N.  W.  316;  26  Am.  St.  Rep.  291. 
See  also  Keener,  "Quasi-Con tracts,"  pp.  424—5. 

381 


§  240]  CONSTRAINT  OF  TAX  OR  ASSESSMENT          [Part  III 

incumbered,  although  it  may  be  patent  to  the  courts  that  such 
a  deed  or  conveyance  is  void  and  of  no  consequence,  as  far  as 
the  holding  of  the  title  is  concerned ;  and,  in  my  opinion,  the 
owner  of  the  land  has  the  right,  in  law  and  equity,  to  treat  every 
such  tax  deed  or  other  conveyance  as  a  cloud  upon  his  title, 
and  to  take  such  steps  to  get  rid  of  it,  or  to  prevent  its  issue  or 
record,  as  the  law  authorizes,  when  the  title  is  actually  clouded, 
as  defined  by  some  of  the  authorities.  A  cloud  upon  a  title 
is  but  an  apparent  defect  in  it.  If  the  title,  sole  and  absolute 
in  fee,  is  really  in  the  person  moving  against  the  cloud,  the  den- 
sity of  the  cloud  can  make  no  difference  in  the  right  to  have  it 
removed.  Anything  of  this  kind  that  has  a  tendency,  even  in  a 
slight  degree,  to  cast  doubt  upon  the  owner's  title,  and  to  stand 
in  the  way  of  a  full  and  free  exercise  of  his  ownership,  is,  in  my 
judgment,  a  cloud  upon  his  title  which  the  law  should  recognize 
and  remove." 

§  240.  (3)  Incumbrance  of  property.  —  Where  a  tax  is  by 
statute  made  a  lien  on  property,  the  payment  of  the  tax,  al- 
though invalid,  in  order  to  remove  the  apparent  lien,  may  be 
regarded  as  a  payment  under  compulsion  (ante  §  217).  This 
is  exemplified,  in  the  case  of  a  lien  on  personalty,  by  the  decision, 
in  Mtna  Ins.  Co.  v.  The  Mayor.1  The  action  was  to  re- 
cover money  paid  for  taxes  illegally  imposed  upon  bank  stock 
owned  by  the  plaintiff,  the  statute  providing  that  such  taxes 
should  be  and  remain  a  lien  thereon  from  the  day  when  the 
property  was  assessed.  The  New  York  Court  of  Appeals 
allowed  a  recovery,  saying : 

"As  this  tax  became  and  remained  a  lien  upon  the  plaintiff's 
bank  stock,  even  after  a  transfer,  it  deprived  it  of  an  essential 
element  of  its  ownership  and  of  its  right  to  transfer  it.  That 
being  the  effect  of  the  imposition  of  the  tax,  we  think  it  amounted 
to  such  an  impounding  or  duress  of  the  plaintiff's  property  as 
to  render  the  payment  so  far  involuntary  as  to  authorize  an 
action  for  the  recovery  of  the  money  thus  wrongfully  received 
by  the  defendant." 

1 1897,  153  N.  Y.  331,  340;  47  N.  E.  593. 
382 


Chap.  XVII]      PREVENTION  OF  RECORD ATION  OF  DEED      [§  241 

Since,  however,  the  assertion  of  an  invalid  lien  upon  personal 
property  may  not  interfere  with  its  use  and  enjoyment,  it 
would  seem  that  the  owner  should  be  required  to  show  some 
special  circumstances,  such  as  an  urgent  necessity  to  sell  the 
property  or  to  raise  money  on  its  security,  constraining  him  to 
extinguish  the  lien  by  payment  instead  of  by  the  slower  process 
of  legal  proceedings  for  its  cancellation. 

To  the  case  of  a  tax  lien  on  real  property  the  same  considera- 
tions apply.  The  existence  of  an  apparent  lien  does  not  in  itself 
constitute  duress.  But  if  a  sale  of  the  property  is  threatened, 
or  if  no  means  are  afforded  for  obtaining  within  a  reasonable 
"time  the  extinguishment  of  the  lien  by  legal  proceedings,1  or  if 
there  are  other  coercive  circumstances,  payment  should  be 
regarded  as  compulsory. 

§  241.  (4)  Prevention  of  recordation  of  deed.  —  In  some  States 
the  recorder  is  required  by  statute  to  refuse  to  accept  a  deed  for 
record  until  the  county  auditor  shall  have  certified  that  the  taxes 
upon  the  land  have  been  paid.  There  is  a  difference  of  opinion 
as  to  whether  taxes  paid  to  enable  the  owner  of  land  to  have  his 
deed  recorded  may  be  recovered  as  paid  under  compulsion.  In 
Minnesota  a  recovery  is  allowed,  the  Supreme  Court  saying, 
in  State  v.  Nelson:2 

"The  inducements  which  the  law  thus  imposes  upon  a  grantee 
of  lands  to  pay  a  tax  of  inconsiderable  amount,  rather  than 
suffer  his  title  to  valuable  lands  to  be  thus  jeopardized,  may  well 
be  deemed  to  amount  to  compulsion.  The  coercion  is  certainly 
as  real,  and  of  substantially  the  same  nature,  as  in  the  case  of  a 
distress  of  goods.  Indeed,  men  of  ordinary  prudence  would  not 
generally  hesitate  to  pay  at  once  such  a  demand  as  is  involved 
in  this  tax,  rather  than  to  incur  the  risk  of  losing  their  entire 
estates  by  not  placing  their  deeds  on  record." 

But  the  Supreme  Court  of  Michigan,  notwithstanding  its 
liberal  attitude  in  the  case  of  taxes  paid  to  prevent  a  threatened 

1  See  Tozer  v.  Skagit  County,  1904,  34  Wash.  147 ;  75  Pac.  638. 

2  1889,  41  Minn.  25,  29  ;  42  N.  W.  548.     Accord:  Oakland  Cemetery 
Assn.  v.  County  of  Ramsey,  1906,  98  Minn.  404 ;   108  N.  W.  857 ;   116 
Am.  St.  Rep.  377. 

383 


§  242]  CONSTRAINT  OF  TAX  OR  ASSESSMENT          [Part  III 

sale  of  land  (ante,  §  239),  has  expressed,  in  Weston  v.  Luce 
County,1  its  disapproval  of  the  decision  in  State  v.  Nelson.  The 
two  cases  are  distinguishable,  however,  in  that  the  taxes  were 
paid  by  the  owner,  in  Weston  v.  Luce  County,  not  to  enable  him 
to  record  the  deed  by  which  he  acquired  title,  but  in  order  that 
a  deed  by  him  to  a  prospective  purchaser  might  be  recorded. 
Conceding  that  this  makes  the  case  somewhat  closer  than  State 
v.  Nelson,  it  is  believed  that  a  recovery  ought  to  have  been  per- 
mitted, since  the  knowledge  of  a  prospective  purchaser  that  he 
would  be  unable  to  secure  the  recordation  of  his  deed  without 
the  payment  of  the  tax  would  undoubtedly  operate  to  lessen 
the  price  obtainable  for  the  land. 

§  242.    (5)  Interference  with  business :    Onerous  penalties.  — 
A  threatened  interference  with  the  business  of  the  taxpayer 
sometimes  is,2  and  sometimes  is  not,3  held  to  constitute  duress 

1 1894,  102  Mich.  528 ;  61  N.  W.  15. 

2  Swift  Co.  v.  United  States,  1884,  111  U.  S.  22,  29;   4  S.  Ct.  244, 
(Internal    revenue     tax.      Mr.     Justice     MATTHEWS:      "The     only 
alternative  was  to  submit  to  an  illegal  exaction,  or  discontinue  its 
business.     It  was  in  the  power  of  the  officers  of  the  law,  and  could 
only  do  as  they  required.") ;  Atchison,  etc.,  R.  Co.  v.  O'Connor,  1912, 

U.  S.  ;  32  S.  C.  216  (tax  on  foreign  corporation)  ;  County  of 
La  Salle  v.  Simmons,  1849,  10  111.  513,  ("gift"  to  county  in  order  to 
get  reissue  of  ferry  license)  ;  Chicago  v.  Waukesha  Brewing  Co.,  1900, 
97  111.  App.  583,  (license  tax  paid  on  threat  of  police  to  prevent  cor- 
poration from  continuing  business) ;  Scottish  Ind.  Co.  v.  Herriott, 
1899,  109  la.  606 ;  80  N.  W.  665 ;  77  Am.  St.  Rep.  548,  (payment  of 
license  tax  by  foreign  corporation  in  order  to  continue  doing  business 
in  State) ;  Cunningham  v.  Monroe,  1860,  15  Gray  (Mass.)  471,  (head 
money  paid  to  secure  entry  at  customs  house) ;  cf.  Cunningham  v. 
Boston,  1860,  15  Gray  (Mass.)  468,  (head  money  paid  in  order  to 
land  passengers) ;  City  of  Vicksburg  v.  Butler,  1878,  56  Miss.  72,  (threat 
to  close  up  shop) ;  cf.  Jackson  v.  Newman,  1882,  59  Miss.  385,  (privi- 
lege tax-:  threat  to  stop  hack) ;  Catoir  v.  Watterson,  1882,  38  Ohio 
St.  319,  (liquor  license:  statute  provided  fine  and  imprisonment). 

3  Emery  v.  Lowell,  1879,  127  Mass.  138,  (illegal  increase  in  liquor 
license) ;    C.  &  J.  Michel  Brewing  Co.  v.  State,  1905,  19  S.  D.  302 ; 
103  N.  W.  40;   70  L.  R.  A.  911,  (license  tax  on  non-resident  whole- 
salers of  liquors) ;    City  of  Houston  v.  Feeser,  1890,  76  Tex.  365 ;    13 
S.  W.  266,  (butcher's  license  tax) ;    Custin  v.  City  of  Viroqua,  1886, 
67  Wis.  314 ;   30  S.  W.  515,  (liquor  license  paid  to  prevent  closing  of 
business).     And    see    Yates  v.  Royal  Ins.  Co.,   1902,  200    111.  202; 
65  N.  E.  726,  (tax  paid  by  foreign  insurance  company  to  continue  busi- 
ness in  State). 

384 


Chap.  XVII]        INTERFERENCE  WITH   BUSINESS  [§  242 

—  the  question  depending  in  a  large  measure,  no  doubt,  upon  the 
extent  of  the  damage  that  may  result,  the  imminence  of  the 
danger,  the  availability  of  reasonably  prompt  judicial  protection, 
and  other  circumstances  (see  ante,  §  218).  In  this  connection 
it  is  noticeable  that  the  courts  seem  less  disposed  to  permit  the 
recovery  of  an  illegal  license  tax  when  it  is  paid  to  secure  the 
privilege  of  opening  a  new  business,  than  when  paid  to  prevent 
the  closure  or  interruption  of  a  business  already  established. 

Though  there  be  no  danger  that  one's  place  of  business  will  be 
closed,  or  that  its  conduct  will  be  otherwise  directly  interfered 
with,  if  the  penalty  imposed  by  the  law  for  non-payment  of  the 
tax  is  an  onerous  one,  payment  of  the  tax  is  regarded  as  compul- 
sory: 

Robertson  v.  Frank  Brothers  Company,  1889,  132  U.  S.  17; 
10  Sup.  Ct.  5:  A  customs  appraiser  required  an  importer  to 
add  certain  charges  to  the  invoices  of  goods  and  declared  that 
whenever  such  charges  should  be  omitted  by  the  importer,  they 
would  be  added  by  the  appraisers  and  a  penalty  of  twenty  per 
cent  of  the  whole  duty  imposed  and  exacted.  The  importer 
made  the  addition  required  and  paid  under  protest  the  increased 
duty  that  resulted.  Mr  Justice  BRADLEY  (p.  24) :  "In  our  judg- 
ment, the  payment  of  money  to  an  official,  as  in  the  present 
case,  to  avoid  an  onerous  penalty,  though  the  imposition  of  the 
penalty  might  have  been  illegal,  was  sufficient  to  make  the 
payment  an  involuntary  one." 

Ratterman  v.  American  Express  Company,  1892,  49  Oh.  St. 
608 ;  32  N.  E.  754 :  An  Ohio  statute  made  it  a  criminal  offense 
punishable  by  imprisonment  for  any  person  to  transact  business 
for  an  express  company  that  failed  to  pay  the  taxes  assessed 
against  it,  and  imposed  a  penalty  upon  any  railroad  company  that 
should  carry  goods  for  such  express  company.  To  avoid  the 
consequences  of  a  violation  of  the  statute,  the  American  Ex- 
press Company  paid  an  illegal  tax  on  its  gross  receipts  from 
interstate  business.  It  was  subsequently  allowed  by  the 
Supreme  Court  of  Ohio  to  recover  the  amount  paid,  the  court 
saying  (p.  621) :  "A  failure  to  comply  with  the  requirement  of 
the  statute  as  to  the  payment  of  the  tax,  would  have  imperiled 
the  existence  of  the  company's  business ;  and  to  save  its  busi- 

385 


§  242]  CONSTRAINT  OF  TAX  OR  ASSESSMENT          [Part  III 

ness  in  this  state,  and,  to  a  large  extent  in  the  United  States 
from  destruction,  it  was  necessary  to  avoid  the  statutory  penal- 
ties and  disabilities.  .  .  .  With  the  obvious  danger  in  view  that 
employees,  and  others  independent  of  and  beyond  the  control 
of  the  express  company  would  be  deterred  by  the  penalties,  and 
refuse  to  carry  for  it  packages,  parcels,  or  merchandise  in  the 
line  of  its  business,  a  payment  of  the  tax  by  the  company  might 
well  be  deemed  to  have  been  made  under  duress  or  coercion, 
and  without  waiver  by  the  company  of  its  day  in  court."  l 

There  .are  cases  which  hold  that  if  the  threatened  penalty, 
no  matter  how  burdensome,  can  be  enforced  only  through  the 
medium  of  an  action  at  law  in  which  the  taxpayer  will  have  an 
opportunity  to  contest  the  validity  of  the  tax,  payment  to  avoid 
the  penalty  is  not  compulsory.2  Perhaps  the  most  conspicuous 
is  Oceanic  Steam  Navigation  Company  v.  Tappan?  A  statute 
of  New  York  imposed  a  tax  upon  alien  passengers,  to  be  col- 
lected from  the  owner  of  the  ship  by  which  they  were  landed. 
If  the  owner  failed  to  make  a  certain  report  he  was  liable  to  a 
fine  of  seventy-five  dollars  for  each  passenger ;  if  he  did  report, 
he  was  required  to  pay  one  dollar  and  fifty  cents  for  each  pas- 
senger, or  was  liable,  if  required  by  the  mayor,  to  give  onerous 
bonds,  and  in  case  of  default  to  pay  a  penalty  of  five  hundred 
dollars  for  each  bond  withheld.  In  order  to  avoid  these  penal- 
ties the  plaintiff  complied  with  the  law,  and  subsequently,  the 
act  having  been  declared  unconstitutional,  sought  to  recover 
the  taxes  paid.  The  court  conceded  that  the  penalties  would 
aggregate  such  an  enormous  sum  as  ordinarily  to  bankrupt  a 
shipowner,  and  that  it  was  consequently  natural  for  the  plaintiff 
to  pay  the  tax  rather  than  run  the  risk  of  litigation,  but  never- 

1  Also :  Maxwell  v.  Griswold,  1850,  10  How.  (U.  S.)  241 ;  Western 
Union  Tel.  Co.  v.  Mayer,  1876,  28  Ohio  St.  521 ;    City  of  Marshall  v. 
Snediker,  1860,  25  Tex.  460 ;  78  Am.  Dee.  534.     And  see  Bergmeyer 
v.  Greenup  County,  1898,  19  Ky.  Law  Rep.  1599 ;  44  S.  W.  82. 

2  Oceanic  Steam  Navigation  Co.  v.  Tappan,  1879,  16  Blatchf.(U.  S. 
C.  C.)  296;  Fed.  Gas.,  No.  10,405;  Benson  ».  Monroe,  1851,  7  Cush. 
(Mass.)  125;   54  Am.  Dec.  716;  Boston,  etc.,  Ins.  Co.  v.   Hendricks, 
1903,  41  Misc.  Rep.  478 ;  85  N.  Y.  Supp.  44. 

8 1879,  16  Blatchf.  (U.  S.  C.  C.)  296;  Fed.  Cas.,  No.  10,405. 

386 


Chap.  XVII]      RETENTION   OF   BENEFIT   INEQUITABLE         [§  243 

theless  decided  that  since  the  penalties  could  only  have  been 
collected  by  suit  and  the  plaintiff  was  therefore  sure  of  his  day 
in  court,  the  tax  was  not  paid  under  "  legal  coercion,"  and  con- 
sequently could  not  be  recovered.  These  decisions  apparently 
overlook  the  vital  distinction  between  the  ordinary  case  of  a 
threatened  suit  and  the  case  of  an  onerous  penalty.  In  the 
former  the  execution  of  the  threat  cannot  possibly  result  in 
serious  hardship,  for  in  the  event  of  an  adverse  decision  only 
the  amount  originally  demanded,  with  the  addition  of  interest 
and  costs,  must  be  paid.  In  the  latter,  on  the  other  hand,  an 
actual  attempt  to  collect  the  penalty  may,  in  the  event  of  a 
determination  adverse  to  the  taxpayer,  impose  upon  him  a  bur- 
den so  heavy  as  to  cripple  his  business  or  even  make  him  a  bank- 
rupt. But,  says  the  court  in  Oceanic  Steam  Navigation  Company 
v.  Tappan,1  "  The  party  paying  is  bound  to  know  the  law  and  to 
assume  that  it  will  be  correctly  administered  by  the  tribunal 
which  is  to  decide  the  controversy."  Here  are  two  conclusive 
presumptions  of  law,  based  upon  considerations  of  public  policy. 
With  the  first  —  that  every  one  knows  the  law  —  we  are  not 
now  concerned,  since  there  is  no  claim  that  payment  is  made  in 
ignorance  of  or  under  a  mistake  of  law.  As  to  the  second  — 
that  every  question  will  be  correctly  decided  by  the  courts  — 
it  is  submitted  that  there  is  no  consideration  of  justice  or  public 
policy  that  requires  its  application  to  the  cases  under  considera- 
tion. It  is  difficult,  indeed,  to  conceive  of  an  act  of  more  ob- 
vious injustice  and  unwisdom  than  to  compel  one  to  assume 
the  risk  of  an  adverse  judicial  decision,  when  not  merely  the 
amount  of  money  involved  in  the  original  controversy  but  a 
penal  sum  so  great  as  to  endanger  the  very  existence  or  solvency 
of  his  business,  is  at  stake. 

§  243.  (II)  Retention  of  benefit  inequitable.  — In  order  to  raise 
an  obligation  to  make  restitution,  it  must  appear,  of  course,  that 
the  money  paid  has  actually  been  received  by  the  defendant,2 

1 16  Blatchf.  (U.  S.  C.  C.)  299. 

2  First  Nat.  Bank  of  Americus  v.  The  Mayor,  1881,  68  Ga.  119; 
45  Am.  Rep.  476;  Otis  v.  People,  1902,  196  111.  542;  63  N.  E.  1053; 
Thompson  v.  City  of  Detroit,  1897,  114  Mich.  502 ;  72  N.  W.  320. 

387 


§  244]  CONSTRAINT  OF  TAX  OR  ASSESSMENT          [Part  III 

and  that  its  retention  is  unjust.  It  follows  that  mere  irregu- 
larities in  the  mode  of  assessment,  not  affecting  the  validity 
of  the  tax,  or  in  the  mode  of  collection,  will  not  entitle  the  tax- 
payer to  recover.1  In  fact,  the  collection  of  a  valid  tax  by  means 
of  an  unlawful  arrest,  while  it  may  amount  to  a  tort  by  the 
officer,  creates  no  quasi  contractual  obligation  to  make  restitu- 
tion.2 If,  in  the  case  of  an  irregular  assessment,  the  taxpayer 
is  compelled  to  pay  more  than  his  fair  proportion  of  the  tax, 
the  excess  "may  be  recovered.3 

§  244.  (Ill)  Necessity  of  protest :  Interest.  —  Protest  will  not 
make  an  otherwise  voluntary  payment  involuntary.4  On  the 
other  hand,  protest  is  not  an  essential  element  of  compul- 

1  Goddard  v.  Seymour,  1862,  30  Conn.  394 ;  Jackson  v.  Town  of 
Union,  1909,  82  Conn.  266 ;  73  Atl.  773 ;  Supervisors  v.  Manny,  1870, 
56  111.  160 ;  Commrs.  v.  Armstrong,  1883,  91  Ind.  528 ;  Hinds  w.Town- 
ship  of  Belvidere,  1895,  107  Mich.  664 ;  65  N.  W.  544 ;  Long  v.  Village 
of  Dundee,  1909,  159  Mich.  320 ;  123  N.  W.  1098. 

2Foss  v.  Whitehouse,  1901,  94  Me.  491;  48  Atl.  109;  Dunbar  v. 
City  of  Boston,  1873,  112  Mass.  75. 

3  Fletcher  Paper  Co.  v.  City  of  Alpena,  1910,  160  Mich.  462 ;    125 
N.  W.  405.     See  also  Jackson  v.  Town  of  Union,  1909,  82  Conn.  266 ; 
73  Atl.  773,  774. 

4  Railroad  Co.  v.  Commrs.,  1878,  98  U.  S.  541 ;    Dear  v.  Varnum, 
1889,  80  Cal.  86 ;   22  Pac.  76 ;   Monaghan  v.  Lewis,  1905,  5  Pennewill 
(Del.)  218;    59  Atl.  948;    Conkling  v.  City  of  Springfield,  1890,  132 
111.  420;  24  N.  E.  67;  Benson  v.  Monroe,  1851,  7  Gush.  (Mass.)  125; 
54  Am.  Dec.  716 ;   Robins  v.  Latham,  1896,  134  Mo.  466 ;  36  S.  W.  33 ; 
Peebles  v.  City  of  Pittsburg,  1882,  101  Pa.  St.  304 ;   47  Am.  Rep.  714. 
But  see  Herold  v.  Kahn,  1908,  159  Fed.  608  ;  86  C.  C.  A.  598,  in  which 
Judge  GRAY  said  (p.  612):  "The  proper  administration  of  the  fiscal 
affairs  of  the  government,  require  that  the  payment  of  taxes  should 
not  be  delayed  by  disputes  as  to  their  legality,  but  that  the  taxes 
should  first  be  paid  and  all  questions  in  regard  to  them  be  determined 
in  suits  brought  for  their  refunding.     It  is  a  wise  policy,  therefore, 
that  encourages  the  payment  under  protest  of  disputed  taxes.     Though 
there  is  some  conflict  in  the  dicta  of  the  Supreme  Court,  we  think  that 
the  true  doctrine  is  that,  when  taxes  are  paid  under  protest  that  they 
are  being  illegally  exacted,  or  with  notice  that  the  pay  or  contends 
that  they  are  illegal  and  intends  to  institute  suit  to  compel  their  re- 
payment, a  sufficient  foundation  for  such  a  suit  has  been  established. 
Chesebrough  v.  U.  S.,  192  U.  S.  253;    City  of  Phila.  v.  Collector,  5 
Wall.   720,  731."     See  also    Thomas  v.  City  of  Burlington,  1886,  69 
la.  140;   28  N.  W.  480;   Dunnell  Mfg.  Co.  v.  Newell,  1886,  15  R.  I. 
233 ;   2  Atl.  766. 

388 


Chap.  XVII]  STATUTORY   REMEDY  [§  246 

sion.1  The  law  does  not  require  a  man  to  protest  when  a  pro- 
test obviously  would  be  useless  (ante,  §  221).  Protest  may, 
however,  be  evidence  of  the  payer's  attitude,2  and  it  has  been 
held  that  in  the  absence  of  a  protest  interest  may  be  recovered 
only  from  the  time  of  demand  or  action  brought,3 ,  instead  of 
from  the  time  of  payment,  as  it  otherwise  may  be.4 

§  245.  (IV)  Demand  and  notice.  —  Demand  is  not  a  condition 
precedent  to  the  right  to  recover  void  taxes  paid  to  a  munici- 
pality under  compulsion ; 5  but  if  it  is  desired  to  hold  the  collect- 
ing officer  personally  responsible  he  should  be  notified,  at  the 
time  the  tax  is  paid,  or  at  least  before  the  money  is  turned  over 
by  him,  that  such  is  the  intention  of  the  payor.6 

§  246.  (V)  Statutory  remedy.  —  In  a  number  of  States  the 
return  of  illegal,  excessive,  and  void  taxes  is  expressly  authorized 
by  statute.7  Such  statutes  are  regarded  as  mandatory,  and  public 

1  Meek  v.  McClure,  1875,  49  Cal.  623,  (not  necessary  if  officer  has 
notice  of  illegality) ;  Jenks  v.  Lima  Township,  1861,  17  Ind.  326,  (pro- 
test evidence  that  payment  made  under  duress ;  cf.  Town  of  Ligonier 
v.  Ackerman,  1874,  46  Ind.  552  ;  15  Am.  Rep.  323)  ;  Howard  v.  Augusta, 
1882,  74  Me.  79 ;  Boston  Glass  Co.  v.  Boston,  1842,  4  Mete.  (Mass.) 
181  ;  Atwell  v.  Zeluff,  1872,  26  Mich.  118;  Cox  v.  Welcher,  1888,  68 
Mich.  263  ;  36  N.  W.  69  ;  13  Am.  St.  Rep.  339 ;  De  Graff  v.  County  of 
Ramsey,  1891,  46  Minn.  319  ;  48  N.  W.  1135. 

2  See  Yates  v.  Royal  Ins.   Co.,   1902,  200  111.  202 ;    65  N.  E.  726 ; 
Jenks  v.  Lima  Township,  1861,  17  Ind.  326. 

3  Boston  Glass  Co.  v.  Boston,  1842,  4  Mete.  (Mass.)   181 ;    Atwell 
v.  Zeluff,  1872,  26  Mich.  118. 

4Erskine  v.  Van  Arsdale,  1872,  15  Wall.  (U.  S.)  75;  Boston,  etc., 
R.  Co.  v.  State,  1885,  63  N.  H.  571 ;  4  Atl.  571 ;  Galveston  County  v. 
Galveston  Gas  Co.,  1889,  72  Tex.  509 ;  10  S.  W.  583. 

5  Bruecher  v.  Village  of  Port  Chester,  1886,  101  N.  Y.  240 ;  4  N.  E. 
272  ;  ^Etna  Ins.  Co.  v.  Mayor,  etc.,  of  New  York,  1897,  153  N.  Y.  331 ; 
47  N.  E.  593. 

6  Erskine  v.  Van  Arsdale,  1872,  15  Wall.  (U.  S.)  75 ;   City  of  Vicks- 
burg  v.  Butler,  1878,  56  Miss.  72.     But   see   Ford   v.  Holden,  1859, 
39  N.  H.  143 ;  Frye  v.  Lockwood,  1825,  4  Cow.  (N.  Y.)  454. 

7  White  v.  Smith,  1898,  117  Ala.  232 ;  23  So.  525 ;   Hayes  v.  County 
of  Los  Angeles,  1893,  99  Cal.  74 ;   33  Pac.  766 ;  Barber  v.  County  of 
Jackson,  1891,  40  HI.  App.  42 ;  Board  of  Commrs.  of  Pulaski  County 
v.  Senn,  1888,  117  Ind.  410 ;  20  N.  E.  276 ;    Lauman  v.  County  of  Des 
Moines,   1870,  29  la.    310;     People    v.  Whemple,   1892,  133  N.  Y. 
617 ;  30  N.  E.  1002 ;  Matter  of  Adams  v.  Supervisors,  1898,  154  N.  Y. 
619 ;  49  N.  E.  144. 

389 


§  246]  CONSTRAINT   OF  TAX  OR  ASSESSMENT  ^      [Part  III 

officers  and  boards  may  be  compelled  by  mandamus  or  similar 
proceeding  to  execute  their  provisions.1  Some  of  the  statutes 
are  by  their  terms  limited  in  operation  to  taxes  paid  or  collected 
under  protest.2  Where  no  such  limitation  is  expressed,  proof 
of  protest  or  coercion  would  seem  to  be  unnecessary ; 3  but  there 
is  authority  to  the  contrary.4 

1  White  v.  Smith,  1898,  117  Ala.  232;   23  So.  525;    Pacific  Coast 
Co.  v.  Wells,  1901,  134  Cal.  471 ;   66  Pac.  657;   Curtis  v.  Pocahontas 
County,  1887,  72  la.  151 ;  33  N.  W.  616 ;  People  ex  rel.  v.  Supervisors 
of  Otsego  County,  1873,  51  N.  Y.  401 ;    In  re  L.  E.  Waterman  Co., 
1901,  33  Misc.  Rep.  569;  68  N.  Y.  Supp.  892. 

2  Knowles  v,  Boston,   1880,   129  Mass.  551 ;    Western  Ranches  v. 
Custer  County,  1903,  28  Mont.  278 ;  72  Pac.  659 ;  Bankers  Life  Assn. 
v.  Commrs.,  1901,  61  Neb.  202 ;  85  N.  W.  54 ;  N.  C.  R.  Co.  v.  Commrs. 
of  Alamance,  1877,  77  N.  C.  4 ;   Centennial  Eureka  Min.  Co.  v.  Juab 
County,  1900 ;  22  Utah  395 ;  62  Pac.  1024. 

3  Pacific  Coast  Co.  v.  Wells,  1901,  134  Cal.  471 ;  66  Pac.  657 ;  City 
of  Indianapolis  v.  Vajen,  1887,  111  Ind.  240;   12  N.  E.  311 ;   Robinson 
v.  City  of  Burlington,  1878,  50  la.  240 ;    Matter  of  Adams  v.  Super- 
visors, 1898,  154  N.  Y.  619 ;  49  N.  E.  144,  (but  see  Matter  of  McCue 
v.  Supervisors,  1900,  162  N.  Y.  235;   56  N.  E.  627. 

4  Matter  of  McCue  v.  Supervisors,  1900,  162  N.  Y.  235 ;   56  N.  E. 
627. 


390 


CHAPTER  XVIII 


CONSTRAINT     OF    AN    OBLIGATION    WHICH,     IN    WHOLE    OR     IN 
PART,   DEFENDANT   OUGHT  TO  HAVE   DISCHARGED 

§  247.     In  general. 

§  248.  (I)  Discharge  of  defendant's  obligation  to  prevent  sale  of 
plaintiff's  property. 

§  249.  Same  :    England  v.  Marsden  and  Edmunds  v.  Wallingford. 

§  250.  Same  :   Must  seizure  of  plaintiff's  property  be  lawful  ? 

§  251.  (II)  Discharge  of  defendant's  obligation  by  sale  or  sacrifice 
of  plaintiff's  property. 

§  252.  (Ill)  Discharge  of  defendant's  obligation  by  plaintiff  as  co- 
obligor  :  In  general. 

§  253.         (1)  Right  of  surety  to  indemnity. 

§  254.         (2)  Right  of  surety  to  contribution. 

§  255.         (3)  Right  of  tort-feasor  to  contribution. 

§  256.  Same  :  Limits  of  rule. 

§  257.  Same  :  Upon  principle. 

§  258.         (4)  Right  of  tort-feasor  to  indemnity. 

§  259.         (5)  Nature  of  tort-feasor's  right  to  contribution  or  indemnity. 

§  247.  In  general.  —  It  has  been  seen  that  one  who,  under 
circumstances  raising  a  moral  duty,  voluntarily  discharges 
another's  obligation,  may  recover  in  quasi  contract  for  the 
benefit  thereby  conferred  (ante,  §  193  etseq.}.  A  fortiori,  one  is 
entitled  to  recover  when  such  discharge  of  another's  obligation 
is  compelled  by  law.  The  compulsion  may  result  either  from 
the  fact  that  the  plaintiff's  property  is  subject  to  sale  or  his 
interests  are  prejudiced  in  case  the  defendant's  obligation  is  not 
performed,  or  from  the  fact  that  the  plaintiff  is  himself  legally 
bound  to  perform  the  duty  which,  as  between  the  plaintiff  and 
the  defendant,  rests  in  equity  and  good  conscience  upon  the 
latter.  The  benefit  to  the  defendant  is  not  less  real  because  it 
consists  of  a  saving  of  expenditure  rather  than  an  addition  to 
his  estate  (ante,  §  8). 

391 


§  248]  CONSTRAINT  OF  AN  OBLIGATION  [Part  III 

§  248.  (I)  Discharge  of  defendant's  obligation  to  prevent  sale 
of  plaintiff's  property.  —  It  is  well  settled  that  money  paid  in 
discharge  of  another's  obligation  in  order  to  prevent  a  sale  of 
one's  property  or  the  sacrifice  of  one's  property  interests  is 
recoverable : 

Exall  v.  Partridge,  1799,  8  Term  R.  308:  Action  against 
three  lessees  of  certain  premises  to  recover  rent  paid  by  the 
plaintiff  in  order  to  prevent  the  sale  of  his  carriage  which  had 
been  left  on  the  premises  in  the  care  of  one  of  the  defendants 
and  had  been  distrained  by  the  landlord.  LE  BLANC,  J.  (p.  311) : 
"The  three  defendants  were  all  by  then*  covenant  bound  to 
see  that  the  rent  was  paid ;  by  their  default  in  not  seeing  that 
it  was  paid,  the  plaintiff's  goods  were  distrained  for  a  debt 
due  from  the  three  defendants  to  Welch  [the  landlord] ;  by  com- 
pulsion of  law  he  was  obliged  to  pay  that  debt ;  and,  therefore, 
I  think  he  has  his  remedy  against  the  three  persons  who  by 
law  were  bound  to  pay,  and  who  did  not  pay  this  money." 

Among  the  cases  which  most  frequently  arise  are  those  of  the 
payment,  by  the  owner,  tenant,  or  mortgagee  of  property,  of 
taxes  or  assessments  on  the  property  which  are  the  obligation 
of  another ; 1  the  payment,  by  the  purchaser  of  property,  of  a 
mortgage  which  ought  to  be  paid  by  the  seller ; 2  the  payment, 
by  a  mortgagee,  of  the  wages  of  a  ship's  crew  or  of  other 

1  Dawson  v.  Linton,  1822,  5  Barn.  &  Aid.  521 ;    Irvine  v.  Angus, 
1899,  93  Fed.  629 ;    35  C.  C.  A.  501 ;    Smith  v.  Rountree,  1900,  185 
111.  219 ;  56  N.  E.  1130 ;  Greer  v.  McCarter,  1869,  5  Kan.  17 ;  Phinney 
v.  Foster,  1905,  189  Mass.  182 ;   75  N.  E.  103 ;    Dana  v.  Colby,  1884, 
63  N.    H.  169;    Graham   v.  Dunigan,  1858,  2  Bosw.   (N.  Y.  Super. 
Ct.)  516;   Hogg  v.  Langstreth,  1881,  97  Pa.  St.  255;  Iron  City  Tool 
Works  v.  Long,  1886,  (Pa.)  7  Atl.  82 ;  Childress  v.  Vance,  1872,  1  Baxt. 
(60  Tenn.)  406 ;   Spokane  v.  Security  Sav.  Soc.,  1907,  46  Wash.  150 ; 
89  Pac.  466,  (payment  of  general  taxes  by  muncipality  to  protect  its 
lien  for  a  street  assessment) ;    Childs  v.  Smith,  1909,  51  Wash,  457 ; 
99  Pac.  304 ;   130  Am.  St.  Rep.  1107,  (of.  on  rehearing  1910,  58  Wash. 
148 ;    107  Pac.  1053).    Contra:  William  Ede  Co.  v.  Heywood,  1908, 153 
Cal.  615 ;    96  Pac.  81 ;    22  L.  R.  A.  (N.  S.)  562,  (strong  dissenting 
opinion  by  Justice  SHAW). 

2  Treat  u.  Craig,  1901,  135  Cal.  91 ;  67  Pac.  7 ;  Weiss  v.  Guerineau, 
1886,  109  Ind.  438 ;   9  N.  E.  399 ;   Sargent  v.  Currier,  1870,  49  N.  H. 
310 ;  6  Am.  Rep.  524 ;  Mclntyre  v.  Ward,  1846,  18  Vt.  434. 

392 


Chap.  XVIII]  DISCHARGE   OF  DEFENDANT'S   OBLIGATION   [§  249 

claims  against  a  ship.1     But  there  are  various  other  cases  in 
which  the  same  obligation  is  enforced.2 

§  249.  Same :  England  v.  Marsden,  and  Edmunds  v.  Walling- 
ford.  —  In  the  case  of  England  v.  Marsden  it  was  held  by  the 
English  Court  of  Common  Pleas,  that  a  recovery  would  not  be 
allowed  where  goods  distrained  and  redeemed  were  upon  the 
premises  of  the  defendant  for  the  benefit  of  the  owner  of  the 
goods  and  without  the  request  of  the  defendant: 

England  v.  Marsden,  1866,  L.  R.  1  C.  P.  529:  Action  to 
recover  money  paid  to  redeem  household  furniture  and  goods 
of  the  plaintiff  distrained  by  the  defendant's  landlord  for  rent. 
The  plaintiff  had  taken  possession  of  the  goods  under  a  bill  of 
sale  or  mortgage  from  the  defendant,  but  had  allowed  the 
goods  to  remain  upon  the  premises  of  the  defendant.  ERLE, 
C.J.  (p.  532) :  "The  plaintiff  having  seized  the  goods  under 
the  bill  of  sale,  they  were  his  absolute  property.  He  had  a 
right  to  take  them  away ;  indeed  it  was  his  duty  to  take  them 
away.  He  probably  left  them  on  the  premises  for  his  own 
purposes,  in  order  that  he  might  sell  them  to  more  advantage. 
At  all  events  they  were  not  left  there  at  the  request  or  for  the 
benefit  of  the  defendant.  It  is  to  my  mind  precisely  the  same 
as  if  he  had  placed  the  goods  upon  the  defendant's  premises 
without  the  defendant's  leave,  and  the  landlord  had  come  in  and 
distrained  them." 

1  Johnson  v.  Royal  Mail  Steam  Packet  Co.,  1867,  L.  R.  3  C.  P.  38 ; 
The  Orchis,  1890,   15  P.  D.  38;     The  Heather  Bell,  [1901]  P.   143. 
And  see  Goodridge  v.  Lord,  1813,  10  Mass.  483. 

2  Murphey  v.  Davey,  1884,  L.  R.  14  Ir.  28,  (payment  of  rent  by 
sub-tenant  of  part  of  premises  to  prevent  eviction) ;   Walker  v.  Smith, 
1856,  28  Ala.  569,  (payment  of  jail  fees  by  owner  of  slaves  who  had  run 
away  from  hirer) ;    Henderson  v.  Welch,  1846,  3  Gilm.   (8  111.)  340, 
(payment  of  costs  of  litigation  by  one  who  was  party  of  record  but  not 
in  interest) ;  Keith  v.  Congregational  Parish,  1838,  21  Pick.  (Mass.) 
261,  (payment  of  parish  debt  by  parishioner) ;    Nichols  v.  Bueknam, 
1875,  117  Mass.  488,  (payment  of  contractor's  debt  for  labor  by  owner 
of  building);    Hoadley  v.  Dumois,  1895,  11  Misc.  Rep.  52;   31  N.  Y. 
Supp.  853,   (payment  of  debt  of  charterer  of  vessel  by  consignee  of 
cargo) ;  Bailey  v.  Bishop,  1910,  152  N.  C.  383 ;  67  S.  E.  968  (payment 
by  plaintiff   for    sidewalk   he  was  compelled   to   lay,  for  which   de- 
fendant had  bound  himself  to  pay).     And  see  Volker  v.  Fisk,  1909,  75 
N.  J.  Eq.  497;   72  Atl.  1011. 

393 


I  250]  CONSTRAINT  OF  AN   OBLIGATION  [Part  III 

Two  reasons  for  denying  relief  are  here  suggested :  first, 
that  in  order  to  support  an  implied  promise  by  the  defendant 
it  must  appear  that  he  requested  that  the  goods  be  left  on  his 
premises,  or  at  least  that  they  were  left  there  for  his  benefit ; 
and  second,  that  the  plaintiff  was  in  a  position  analogous  to 
that  of  a  wrongdoer  or  an  officious  volunteer,  in  that  he  had  no 
right  to  leave  the  goods  on  the  premises.  Both  arguments  ap- 
pear to  be  unsound.  The  first  confuses  quasi  contractual  ob- 
ligation with  the  obligation  of  a  genuine  promise  implied  from 
a  request  or  from  other  conduct  of  the  parties.  The  second 
assumes  that  the  goods  were  left  on  the  premises  without  the 
consent  of  the  defendant,  a  fact  which  certainly  does  not  appear 
in  the  record.  It  is  believed,  therefore,  that  the  limitation 
cannot  be  supported  upon  principle ;  and,  as  a  matter  of  fact,  it 
has  failed  to  command  the  support  of  more  recent  authority : 

Edmunds  v.  Wallingford,  1885,  14  Q.  B.  D.  811 :  LINDLEY, 
L.J.,  referring  to  England  v.  Marsden  (p.  816).  "This  appears 
to  us  a  very  questionable  decision.  The  evidence  did  not 
shew  that  the  plaintiff's  goods  were  left  in  the  defendant's 
house  against  his  consent ;  and  although  it  is  true  that  the 
plaintiff  only  had  himself  to  blame  for  exposing  his  goods  to 
seizure,  we  fail  to  see  how  he  thereby  prejudiced  the  defendant, 
or  why,  having  paid  the  defendant's  debt  in  order  to  redeem  his 
own  goods  from  unlawful  seizure,  the  plaintiff  was  not  entitled 
to  be  reimbursed  by  the  defendant." 

§  250.  Same :  Must  seizure  of  plaintiff's  property  be  lawful  ? 
—  In  the  carefully  considered  case  of  Edmunds  v.  Wallingford,1 
it  was  declared  to  be  necessary  to  the  plaintiff's  right  of  action 
that  the  seizure  of  his  goods  shall  have  been  lawful,  i.e.  it  must 
appear  "  that  as  between  the  owner  of  the  goods  and  the  person 
seizing  them,  the  latter  shall  have  been  entitled  to  take  them." 
And  in  the  Maryland  case  of  Myers  v.  Smith?  the  plaintiff's 
failure  to  show  the  lawfulness  of  the  seizure  led  to  a  denial  of 

>1885,  14  Q.  B.  D.  811,816. 

2 1867,  27  Md.  91.  And  see  Stevens  v.  Smith,  1907,  112  N.  Y. 
Supp.  361. 

394 


Chap.  XVIII]    DISCHARGE  OF  DEFENDANT'S   OBLIGATION    [§  251 

relief.  The  logic  of  this  limitation  is  not  apparent,  since  an 
unlawful  seizure,  especially  if  believed  to  be  lawful,  may  be  just 
as  coercive  as  a  lawful  one.  Its  only  justification  is  that  in  case 
of  an  unlawful  seizure  the  owner  of  the  goods  may  recover 
from  the  recipient  money  paid  to  release  them.  But  there 
would  seem  to  be  no  harm  in  allowing  an  alternative  remedy 
against  the  obligor,  and  moreover,  as  Professor  Keener  points 
out,1  to  allow  such  a  remedy  against  the  obligor  would  tend  to 
prevent  circuity  of  action,  since  a  recovery  by  the  owner  of  the 
property  against  the  payee  would  lead  to  renewed  proceedings 
for  the  enforcement  of  the  obligation.  It  need  hardly  be  added 
that  the  obligation  of  the  defendant  discharged  by  the  plaintiff's 
payment  must  be  a  valid  and  subsisting  one. 

§  251.  (II)  Discharge  of  defendant's  obligation  by  sale  or  sacri- 
fice of  plaintiff's  property.  —  If  money  paid  to  prevent  the  sale 
of  one's  property  in  satisfaction  of  another's  obligation  may  be 
recovered,  it  follows  that  in  case  of  an  actual  sale  the  owner  may 
either  purchase  his  own  property  at  such  sale,2  or  permit  it  to 
be  purchased  by  a  third  person,  and  recover  the  purchase  price 
from  the  obligor.3 

It  should  be  noted  that  the  law  may  compel  one  indirectly 
to  discharge  another's  obligation  without  a  sale  or  a  threatened 
sale  of  one's  goods.  Thus,  the  assignee  for  value  of  a  chose  in 
action  may  have  his  judgment  diminished  by  a  claim  of  set-off 
against  the  assignor  of  which  the  assignee  had  no  notice.  This 
amounts  to  a  compulsory  sacrifice  of  the  assignee's  property  in 
the  discharge  of  the  assignor's  obligation,  and  if  the  contract 
of  assignment  affords  no  remedy  against  the  assignor  the  as- 
signee may  recover  in  quasi  contract : 

1  Keener,  "Quasi-Contracts,"  p.  395. 

2  Wells  v.  Porter,  1831,  7  Wend.  (N.  Y.)  119;    Hunt  v.  Amidon, 
1842,  4  Hill  (N.  Y.)  345 ;  40  Am.  Dec.  283. 

3  Edmunds  v.  Wallingford,  1885,  14  Q.  B.  D.  811,  (action  by  the 
trustee  in  bankruptcy  of  two  sons  of  the  defendant  to  recover   the 
amount  realized  by  the  sale  of  goods  which,  as  between  the  father  and 
his  sons,  belonged  to  the  sons,  but  which,  because  of  circumstances 
estopping  the  sons  from  denying  their  father's  title,  had  been  sold  by 
the  sheriff  under  a  judgment  against  the  father).    And  see  Sargent 
v.  Currier,  1870,  49  N.  H.  310 ;  6  Am.  Rep.  524. 

395 


§  252]  CONSTRAINT  OF  AN  OBLIGATION  [Part  III 

Ticvnic  Bank  v.  Smiley,  1847,  27  Me.  225 :  Assumpsit  by 
the  pledgees  of  a  note  against  the  payee,  who  had  indorsed  it 
"indorser  not  holden,"  to  recover  the  sum  of  $51.80,  which  sum 
was  due  from  the  said  payee  to  the  maker  of  the  note  on  an 
account  and  was  set  off  by  the  maker  when  sued  on  the  note 
by  the  pledgees.  WHITMAN,  C.J.  (p.  229):  "But,  by  the 
operation  of  law,  the  plaintiffs  have  been  compelled,  in  effect, 
to  pay  a  debt  due  from  him  [defendant].  .  .  .  The  plaintiffs, 
not  being  apprised  of  any  such  claim  in  set-off,  were  entitled 
to  find  the  note  free  from  any  such  claim ;  but  by  the  operation 
of  law  were,  nevertheless,  compelled  to  pay  a  debt,  which  in 
equity  and  good  conscience  the  defendant  should  have  kept 
from  being  so  claimed  and  paid.  He  may  therefore  be  con- 
sidered as  having  in  effect,  requested,  or  perhaps  more  properly, 
as  having  compelled  the  plaintiffs  to  pay  the  amount  claimed." 

§  252.  (Ill)  Discharge  of  defendant's  obligation  by  plaintiff 
as  co-obligor :  In  general.  —  It  is  an  accepted  principle  that  one 
who,  in  the  discharge  of  his  own  legal  obligation,  has  done  that 
which  as  between  himself  and  another  rested  in  equity  and  good 
conscience  upon  the  latter,  is  entitled  to  restitution  of  the  bene- 
fit thereby  conferred.1  The  most  frequent  and  important  ap- 
plication of  the  principle  is  to  cases  (1)  of  indemnity  of  sureties 
by  their  principals,  (2)  of  contribution  between  sureties  or  other 
co-contractors,  (3)  of  contribution  between  joint  tort-feasors, 
and  (4)  of  indemnity  of  tort-feasors.  This  is  not  the  place  for  a 
comprehensive  treatment  of  these,  but  the  nature  of  the  obli- 
gation will  be  briefly  considered. 

§  253.  (1)  Right  of  surety  to  indemnity.  —  The  obligation  of 
the  principal  debtor,  in  the  absence  of  an  express  undertaking, 
to  indemnify  his  surety,  had  its  origin  in  equity.2  Lord  MANS- 
FIELD had  no  hesitation,  however,  in  enforcing  it  at  law  in  an 
action  for  money  paid  to  the  principal's  use : 

1  Brown  v.  Hodgson,  1811,  4  Taunt.  189,  (plaintiff,  a  carrier,  who  had 
misdelivered  goods  to  defendant  instead  of  to  P.  and  who  paid  P.  the 
value  of  the  goods,  allowed  to  recover  from  defendant) ;  Brittain  v. 
Lloyd,  1845,  14  Mees.  &  Wels.  762,  (auctioneer  who  had  paid  duty 
allowed  to  recover  from  his  employer) ;  Lewis  v.  Campbell,  1849,  8 
C.  B.  541. 

J  Layer  v.  Nelson,  1687,  1  Vern.  456. 

396 


Chap.  XVIII]      RIGHT   OF   SURETY   TO   INDEMNITY  [§  253 

Decker  v.  Pope,  1757,  1  Selw.  N.  P.  76  n. :  "Lord  Mansfield 
directed  the  jury  to  find  for  the  plaintiff;  observing,  that 
where  a  debtor  desires  another  person  to  be  bound  with  him  or 
for  him,  and  the  surety  is  afterwards  obliged  to  pay  the  debt, 
this  is  a  sufficient  consideration  to  raise  a  promise  in  law,  and  to 
charge  the  principal  in  an  action  for  money  paid  to  his  use." 

Lord  MANSFIELD'S  statement  that  the  obligation  of  the  prin- 
cipal arises  upon  payment  by  the  surety  indicates  clearly  a 
quasi  contractual  character.  In  a  number  of  cases  it  appears 
to  have  been  so  regarded.1  That  it  has  come  to  be  treated 
generally  as  a  genuine  implied  contract,  however,  is  evidenced 
by  the  abundant  authority  which  holds  that  the  obligation 
arises  when  the  surety  becomes  bound,  rather  than  when  the 
surety  pays.2 

1  Toussaint  v.  Martinnant,   1787,  2  Term  R.   100 ;    Townsend  v. 
Sullivan,   1906,  3  Cal.  App.   115;    84  Pac.  435;    Vermeule  v.  York 
Cliffs  Improvement  Co.,  1909,  105  Me.  350-;    74  Atl.  800 ;    134  Am. 
St.  Rep.  553 ;  Norton  v.  Coons,  1851,  6  N.  Y.  33 ;   Tobias  ».  Rogers, 
1855,  13  N.  Y.  59;  Johnson  ».  Harvey,  1881,  84  N.  Y.  363;    38  Am. 
Rep.  515 ;    Oldham  ».   Broom,  1874,  28  Oh.  St.  41 ;    Aldrich  v.  Al- 
drich,  1883,  56  Vt.  324 ;  48  Am.  Rep.  791. 

"Again,  it  is  an  equitable  principle  of  very  general  application 
that  where  one  person  is  in  the  situation  of  a  mere  surety  for  another, 
whether  he  became  so  by  actual  contract  or  by  operation  of  law,  if 
he  is  compelled  to  pay  the  debt  which  the  other  in  equity  and  justice 
ought  to  have  paid,  he  is  entitled  to  relief  against  the  other,  who  was 
in  fact  the  principal  debtor.  And  when  courts  of  law,  a  long  time 
since,  fell  in  love  with  a  part  of  the  jurisdiction  of  the  court  of  chancery 
and  substituted  the  equitable  remedy  of  an  action  of  assumpsit  upon  the 
common  money  counts,  for  the  more  dilatory  and  expensive  proceedings 
by  a  bill  in  equity  in  certain  cases,  they  permitted  the  person  thus  stand- 
ing in  the  situation  of  surety,  who  had  been  compelled  to  pay  money  for 
the  principal  debtor,  to  recover  it  back  again  from  the  person  who 
ought  to  have  paid  it,  in  this  equitable  action  of  assumpsit  as  for  money 
paid,  laid  out,  and  expended  for  his  use  and  benefit." — WALWORTH, 
Ch.,  in  Hunt  ».  Amidon,  1842,  4  Hill  (N.  Y.)  345,  348 ;  40  Am.  Dec. 
283. 

2  In  re  Stout,  1900,  109  Fed.  794,  (D.  C.  Mo.) ;  Keel  v.  Larkin,  1882, 
72  Ala.  493;    Choteau  v.  Jones,  1849,  11  111.  300;   50  Am.  Dec.  460; 
Sargent  v.  Salmond,  1847,  27  Me.  539;    Appleton  v.  Bascom,  1841, 
3  Mete.   (Mass.)  169;    Labbe  v.  Bernard,  1907,  196  Mass.  551;    82 
N.  E.  688 ;    14  L.  R.  A.  (N.  S.)  457  (semble) ;  Loughridge  &  Bogan  v. 
Bowland,  1876,  52  Miss.  546;'  Carlisle  v.  Rich,  1835,  8  N.  H.  44, 

397 


§  254]  CONSTRAINT   OF  AN   OBLIGATION  [Part  III 

§  254.  (2)  Right  of  surety  to  contribution.  —  The  obligation 
of  a  surety  to  contribute,  like  that  of  the  principal  to  indemnify 
his  surety,  was  first  recognized  in  equity :  and  then  adopted  by 
courts  of  law.2  It  is  frequently  said  to  be  equitable  in  its  nature 
and  to  rest  upon  "  general  principles  of  justice," 3  or  upon  the 
principle  that  sureties  "  are  all  in  cequali  jure,  and  as  the  law 
requires  equality  they  shall  equally  bear  the  burden."  4  This 
has  been  thought  to  mean  that  the  obligation  is  really  quasi 
contractual.5  Theoretically,  without  doubt,  it  is  a  proper  case 
for  the  application  of  the  quasi  contractual  doctrine  under 
consideration  in  this  chapter,  for,  in  so  far  as  one  surety  pays 
more  than  his  aliquot  share  of  the  debt,  he  performs  an  obligation 
which  in  equity  and  good  conscience  rests  upon  his  co-surety, 
and  thereby  confers  a  benefit  upon  the  latter  which  it  is  unjust 
for  him  to  retain. 

The  theory  of  a  quasi  contractual  foundation,  however, 
directly  encounters  the  accepted  rule  of  equity  that  a  surety,  as 
soon  as  the  creditor's  claim  against  him  is  established,  and  with- 
out first  paying  the  debt,  may  bring  a  bill  to  compel  his  co- 
surety to  contribute  with  him,6  and  the  rule  of  both  law  and 
equity  that  if  a  surety  dies  after  entering  into  the  contract  of 

(semble)  ;  Blanchard  v.  Blanchard,  1908,  61  Misc.  Rep.  497;  113  N.  Y. 
Supp.  882;  aff.  1909,  133  App.  Div.  937;  118  N.  Y.  Supp.  1095; 
Graeber  v.  Sides,  1909,  151  N.  C.  596;  66  S.  E.  600;  Poe  v.  Dixon, 
1899,  60  Oh.  St.  124 ;  54  N.  E.  86 ;  71  Am.  St.  Rep.  713,  (semble) ; 
Barney  v.  Grover,  1856,  28  Vt.  391.  But  see,  contra,  Townsend  v. 
Sullivan,  1906,  3  Cal.  App.  115;  84  Pac.  435. 

1  Offley  and  Johnson's  Case,  1584,  2  Leo.  166 ;    Layer  «.  Nelson, 
1687,  1  Vern.  456. 

2  Turner  v.  Davis,  1796,  2  Esp.  479 ;    Cowell  v.  Edwards,  1800,  2 
Bos.  &  Pul.  268. 

3  Conover  v.  Hill,  1875,  76  111.  342. 

4  Deering  v.  Earl  of  Winchelsea,  1787,  2  Bos.  &  Pul.  270 ;   Weeks  v. 
Parsons,  1900,  176  Mass.  570;    58  N.   E.    157;    Board  of  Commrs. 
v.  Dorsett,  1909,  151  N.  C.  307 ;  66  S.  E.  132 ;  Fischer  v.  Gaither,  1898, 
32  Or.  161;   51  Pac.  733. 

5  See  Keener,  "  Quasi-Contracts,"  pp.  401,  402. 

6  Wolmershausen  v.  Gullick,  [1893]  2  Ch.  514 ;   Morrison  v.  Poyntz, 
1838,  7  Dana   (37  Ky.)  307;   32  Am.  Dec.  92.     See  also  Robinson 
v.  Harkin,  [1896]  2  Ch.  415,  (contribution  between  trustees) ;  Hodgson 
v.  Baldwin,  1872,  65  111.  532. 

398 


Chap.  XVIII]      RIGHT   OF   SURETY   TO   CONTRIBUTION          [§  254 

suretyship  but  before  any  payment  is  made,  his  estate  is  liable 
to  the  co-surety  who  subsequently  pays  the  debt.1 

Some  of  the  cases  in  support  of  this  last  proposition  indicate 
with  particular  clearness  that  for  the  purpose  of  a  remedy  at 
law  the  obligation  is  regarded  as  purely  contractual: 

Johnson  v.  Harvey,  1881,  84  N.  Y.  363;  38  Am.  Rep.  515: 
FINCH,  J.  (p.  365) :  "  It  was  held  in  Bradley  v.  Burwell  (3  Den. 
61),  that  the  death  of  one  of  two  or  more  sureties  did  not 
relieve  his  estate  from  the  liability  to  contribute,  and  the  de- 
cision was  put  upon  the  ground  that  the  law  implies  a  contract 
between  co-sureties  to  contribute  ratably  toward  discharging 
any  liability  which  they  may  incur  in  behalf  of  their  principal, 
such  contract  originating  at  the  time  they  execute  the  original 
undertaking,  and  that  in  the  case  of  the  death  of  either  this 
obligation  devolves  upon  his  legal  representatives,  and  is  like 
any  other  contract  made  by  one,  in  his  lifetime,  to  pay  money 
at  a  future  time,  absolutely  or  contingently,  who  dies  before  any 
breach  of  the  contract." 

Chipman  v.  Morrill,  1862,  20  Cal.  130 ;  FIELD,  C.J.  (p.  135) : 
"In  support  of  the  first  position,  the  appellant  cities  various 
authorities  upon  the  doctrine  of  contribution  as  between  co- 
sureties, to  the  effect  that  such  doctrine  depends  more  upon  a 
principle  of  equity  than  upon  contract.  Such  is  undoubtedly 
the  case  as  between  co-sureties,  and  the  principle  is,  that  where 
there  is  a  common  liability,  equality  of  burthen  is  equity. 
Courts  of  equity,  therefore,  naturally  took  jurisdiction  of 
cases  of  contribution,  where  one  surety  had  paid  more  than  his 
just  proportion.  But  the  equitable  doctrine,  in  the  progress 
of  time,  became  so  well  established,  that  parties  were  presumed 
to  enter  into  contracts  of  suretyship  upon  its  knowledge ;  and 
consequently,  upon  a  mutual  understanding  that  if  the  principle 
failed,  each  would  be  bound  to  share  with  the  others  a  pro- 
portionate loss.  Courts  of  common  law  thereupon  assumed 

1  Handley  v.  Helfin,  1888,  84  Ala.  600 ;  4  So.  725 ;  Hecht  v.  Skaggs, 
1890,  53  Ark.  291 ;  13  S.  W.  930 ;  22  Am.  St.  Rep.  192 ;  Wood  v. 
Leland,  1840,  1  Mete.  (Mass.)  387 ;  Johnson  v.  Harvey,  1881,  84  N.  Y. 
363  ;  38  Am.  Rep.  515 ;  Aiken  v.  Peay's  Extrs.,  1850,  5  Strobh.  (S.  C.) 
15 ;  53  Am.  Dec.  684 ;  Pace  v.  Pace's  Admr.,  1898,  95  Va.  792  •  30 
S.  E.  361 ;  44  L.  R.  A.  459. 

399 


§  254]  CONSTRAINT  OF  AN  OBLIGATION  [Part  III 

jurisdiction  to  enforce  contribution  between  sureties,  proceeding 
on  the  principle  that  from  their  joint  undertaking  there  was  an 
implied  promise  on  the  part  of  each  surety  to  contribute  his 
share,  if  necessary,  to  make  up  the  common  loss."  1 

The  genuine  implied  contract  theory  may  be  thought  to  be 
likewise  supported  by  the  rule  generally  adopted  by  courts  of 
law,  differing  from  that  in  equity,  as  to  the  measure  of  contri- 
bution —  that  each  surety  is  liable  for  a  proportionate  part  of 
the  loss,  according  to  the  number  of  sureties  originally  bound, 
whether  or  not  all  are  alive  and  solvent  at  the  time  the  debt  is 
paid.2  As  a  matter  of  fact  Lord  CAMPBELL,  in  Batard  v.  Hawes, 
expressly  based  this  rule  upon  the  contract  theory.3  But  the 
true  reason  for  it,  as  recognized  in  many  of  the  cases,  is  that  the 
liability  of  the  sureties  being  several,  "  the  law  cannot,  in  such 
complicated  cases,  do  complete  justice  by  one  final  determina- 
tion ;  and  therefore  it  olid  not  undertake  it."  4 

On  the  other  hand,  it  seems  clear  that  the  obligation  cannot 
logically  rest  on  the  notion  of  a  genuine  implied  contract,  since 

1  Accord :  Craythorne  v.  Swinburne,  1807,  14  Ves.  Jr.  160 ;  Norton 
v.  Coons,  1851,  6  N.  Y.  33. 

2  Brown  v.  Lee,  1827,  6  Barn.  &  Ores.  689 ;  In  re  MacDonaghs,  1876, 
Ir.  R.  10  Eq.  269 ;   Moore  v.  Bruner,  1889,  31  111.  App.  400 ;   Stothoff 
v.  Dunham's  Exrs.,  1842,  19  N.  J.  L.  181 ;   Easterly  ».  Barber,  1876, 
66  N.  Y.  433 ;   Powell  v.  Matthis,  1843,  4  Ired.  L.  (26  N.  C.)  83 ;   40 
Am.  Dee.  427 ;    Fischer  v.  Gaither,  1898,  32  Or.  161 ;    51  Pac.  736 ; 
Riley  v.  Rhea,  1880,  5  Lea  (73  Tenn.)  115;   Acers  v.  Curtis,  1887,  68 
Tex.  423;    4  S.  W.  551.     See  Sloan  v.  Gibbes,  1900,  56  S.  C.  480; 
35  S.  E.  408 ;  76  Am.  St.  Rep.  559,  (equity  rule). 

3  Batard  v.  Hawes,  1853,  2  Ell.  &  Bl.  287,  296.    Lord  CAMPBELL, 
C.J. :  "If  the  right  of  contribution  is  to  be  considered  as  arising  merely 
from  the  fact  of  payment  being  made,  so  as  to  relieve  a  party  jointly 
liable  from  legal  liability,  we  should  have  to  look  to  the  number  of 
contractors  actually  liable  at  law  at  the  time  of  making  the  payment 
which  relieved  them  from  liability.     But  we  think  that  it  is  not  merely 
the  legal  liability  to  the  creditor  at  the  time  of  the  payment  which 
we  are  to  regard,  but  that  we  must  look  to  the  implied  engagement  of 
each,  to  pay  his  share,  arising  out  of  the  joint  contract  when  entered 
into." 

*  RTJFFIN,  C.J.,  in  Powell  v.  Matthis,  1843,  4  Ired.  (26  N.  C.)  83, 
85 ;  40  Am.  Dec.  427.  See  also  Easterly  v.  Barber,  1876,  66  N.  Y. 
433. 

400 


Chap.  XVIII]    RIGHT  OF  TORT-FEASOR  TO  CONTRIBUTION   [§  255 

contribution  will  be  enforced  under  circumstances  which  con- 
clusively negative  the  existence  of  contract,  as  where  two  sure- 
ties become  such  by  separate  instruments  and  are  entire  stran- 
gers to  each  other,1  or  where  they  become  sureties  by  the  same 
instrument  but  at  different  times.2  In  neither  of  these  cases 
can  there  be  said  to  be  any  evidence  of  an  intention  to  enter  into 
a  contribution  contract,  and  moreover,  in  the  latter  no  con- 
sideration can  be  found  to  support  such  a  contract,  since  the 
one  who  first  becomes  surety  surrenders  no  right  when  the  other 
subsequently  assumes  the  obligation. 

In  conclusion,  it  may  be  said  that  while  the  law  of  contribu- 
tion between  sureties  might  well  have  been  erected  upon  the 
quasi  contractual  doctrine  considered  in  this  chapter,  it  is  diffi- 
cult to  show,  in  the  light  of  the  adjudged  cases,  that  it  actually 
has  been  built  upon  that  or,  indeed,  upon  any  other  single 
doctrine.  In  equity,  as  has  been  said,  the  obligation  is  referred 
to  the  so-called  principle  that  where  there  is  a  common  liability 
the  burden  should  be  equal.  At  common  law,  the  courts  have 
generally  regarded  it  as  contractual,  although  in  practice  some- 
times appearing  to  confuse  contractual  with  quasi  contractual 
obligation,  and  at  other  times,  falling  back  on  the  somewhat 
indefinite  principle  of  equity  just  referred  to. 

§  255.  (3)  Right  of  tort-feasor  to  contribution.  —  It  has  long 
been  a  familiar  maxim  that  as  between  joint  tort-feasors  con- 
tribution will  not  be  enforced.  This  exception  to  the  general 

1  Deering  v.  Earl  of  Winchelsea,  1787,  2  Bos.  &  Pul.  270 ;  s.  c.  1 
Cox  318 ;  Craythorne  v.  Swinburne,  1807,  14  Ves.  Jr.  160 ;  Mayhew  t>. 
Crickett,  1818,  2  Swans.185;  In  re  Sir  J.  J.  Ennis,  [1893]  3  Ch.  238; 
Cobb  v.  Haynes,  1847,  8  B.  Mon.  (47  Ky.)  137;  Craig  &  Angle  v. 
Ankeney,  1846,  4  Gill  (Md.)  225 ;  Young  v.  Shunk,  1883,  30  Minn. 
503  ;  16  N.  W.  402 ;  Barnes  v.  Gushing,  1901,  168  N.  Y.  542  ;  61  N.  E. 
902;  National  Surety  Co.  v.  Di  Marsico,  1907,  55  Misc.  Rep.  302; 
105  N.  Y.  Supp.  272  ;  Bright  v.  Lennon,  1880,  83  N.  C.  183  ;  Robinson 
v.  Boyd,  1889,  60  Oh.  St.  57  ;  53  N.  E.  494 ;  Thompson  v.  Dekum,  1898, 
32  Or.  506;  52  Pac.  517,  755;  Harris  ».  Ferguson,  1831,  2  Bailey  L. 
(S.  C.)  397;  Rudolf  v.  Malone,  1899,  104  Wis.  470;  80  N.  W.  743. 

2Golsen  v.  Brand,  1874,  75  111.  148;  Chaffee  v.  Jones,  1837,  19 
Pick.  (Mass.)  260;  Warner  v.  Morrison,  1862,  3  Allen  (Mass.)  566; 
Norton  v.  Coons,  1851,  6  N.  Y.  33 ;  Stovall  v.  Border  Grange  Bank, 
1883,  78  Va.  188. 

401 


§  256]  CONSTRAINT  OF  AN  OBLIGATION  [Part  III 

rule  had  its  origin  in  Merry  weather  v.  Nixan,1  decided  in  1799  and 
commonly  referred  to  as  the  leading  case  on  the  subject.  One 
Sharkey  had  brought  an  action  on  the  case  against  the  plaintiff 
and  defendant  in  this  case,  for  an  injury  done  by  them  to  his 
reversionary  estate  in  a  mill,  in  which  was  included  a  count  in 
trover  for  the  machinery  belonging  to  the  mill,  and  having  re- 
covered judgment,  collected  the  whole  amount  thereof  from  the 
present  plaintiff,  who  thereupon  brought  this  action  for  contri- 
bution. Lord  KENYON  held  that  the  plaintiff  was  properly  non- 
suited, but  did  not  state  the  grounds  upon  which  he  based  his 
decision,  merely  remarking  that  "  he  had  never  before  heard  of 
such  an  action  having  been  brought  where  the  former  recovery 
was  for  a  tort,"  and  adding  that  his  decision  "  would  not  affect 
cases  of  indemnity,  where  one  man  employed  another  to  do  acts, 
not  unlawful  in  themselves,  for  the  purpose  of  asserting  a  right." 

The  maxim  is  now  subject  to  so  many  limitations  that,  stated 
without  qualification,  it  can  hardly  be  regarded  as  a  rule  of 
law.2 

§  256.  Same :  Limits  of  rule.  —  As  between  parties  who 
have  committed  acts  which  they  knew  or  ought  to  have  known 
were  wrongful,  the  rule  is  uniformly  and  unhesitatingly  applied.3 

1  8  Term  R.  186.     The  exception  was  foreshadowed  in  Battersey's 
case,  1623,  Winch  48. 

2  In  Bailey  v.  Bussing,  1859,  28  Conn.  455,  459,  ELLSWORTH,  J., 
said :   "Indeed  we  think  this  maxim  too  much  broken  in  upon  at  this 
day  to  be  called  with  propriety  a  rule  of  law,  so  many  are  the  exceptions 
to  it." 

3  Arnold  ».  Clifford,  1835,  2  Sumn.  (U.  S.  C.  C.)  238;  Fed.  Cas., 
No.  555,  (libel);   Wanack  v.  Michels,  1905,  215  HI.  87;   74  N.  E.  84, 
(statutory  liability  for  injury  resulting  from  sale  of  liquor) ;    Sutton 
v.  Morris,  1898,  102  Ky.  611 ;    19  Ky.  Law  Rep.  1654 ;    44  S.  W.  127, 
(wrongful  cutting  and  carrying  away  timber) ;   Avery  v.  Central  Bank, 
1909,  221  Mo.  71 ;  119  S.  W.  1106,  (misappropriation  of  bank's  funds) ; 
Johnson  v.  Torpy,  1892,  35  Neb.  604 ;  53  N.  W.  575 ;  37  Am.  St.  Rep. 
447,  (sale  of  liquor  to  known  habitual  drunkard) ;   Sharp  v.  Call,  1903, 
69  Neb.  72 ;   95  N.  W.  16 ;   96  N.  W.  1004,  (misappropriation  of  cor- 
porate funds) ;  Bigelow  v.  Old  Dominion,  etc.,  Co.,  1908,  74  N.  J.  Eq. 
457  ;  71  Atl.  153,  176,  (plaintiff,  a  corporation  promoter,  had  been  com- 
pelled to  account  for  secret  profit) ;   Peck  v.  Ellis,  1816,  2  Johns.  Ch. 
(N.  Y.)  131,  (fraudulent  conversion  of  timber) ;  Miller  v.  Fenton,  1844, 
11  Paige  (N.  Y.)  18,   (misappropriation  of  bank's  funds);    Davis  v. 

402 


Chap.  XVIII]  RIGHT  OF  TORT-FEASOR  TO  CONTRIBUTION  [§  256 
i 

As  between  parties  who  are  legally  responsible  for  a  wrong,  not 
because  they  authorized  or  actually  participated  in  its  commis- 
sion, but  because  of  their  relation  to  the  actual  wrongdoer,  the 
rule  is  generally  held  inapplicable,  and  contribution  is  enforced.1 
The  same  is  true  when,  although  the  parties  authorized  or  ac- 
tually participated  in  such  an  infringement  of  another's  legal 
rights  as  constitutes  a  tort,  they  acted  in  good  faith  and  are  not 
chargeable  with  knowledge  that  their  action  was  wrongful.2 

Gelhaus,  1886,  44  Ohio  St.  69;  4  N.  E.  593,  (embezzlement) ;  Fakes  v. 
Price,  1907,  18  Okl.  413 ;  89  Pac.  1123,  (judgment  for  fraud  in  manage- 
ment of  corporation :  court  allows  contribution  as  to  costs) ;  Boyer 
v.  Bolender,  1889,  129  Pa.  St.  324 ;  18  Atl.  127  ;  15  Am.  St.  Rep.  723, 
(misappropriation  of  corporate  funds) ;  Rhea  v.  White,  1859,  3  Head 
(40  Tenn.)  121,  (conversion  of  slaves) ;  Spaulding  v.  Oakes,  1869,  42 
Vt.  343,  (failure  to  restrain  animal  known  to  be  vicious:  evidently 
regarded  as  equivalent  to  intentional  wrong) ;  Atkins  v.  Johnson, 
1870,  43  Vt.  78;  5  Am.  Rep.  260,  (libel).  And  see  Hunt  v.  Lane, 
1857,  9  Ind.  248,  and  Anderson  v.  Saylors,  1859,  3  Head  (40  Tenn.) 
551,  in  which  the  nature  of  the  act  does  not  appear.  But  see  Fort 
Scott  v.  Kansas  City,  etc.,  R.  Co.,  1903,  66  Kan.  610;  72  Pac.  238,  in 
which  a  recovery  was  allowed  under  a  statute  authorizing  contribu- 
tion between  joint  judgment  debtors. 

1  Wooley  v.  Batte,  1826,  2  Car.  &  P.  417,  (negligence  of  servant) ; 
Pearson  v.  Skelton,  1836,  1  Mees.  &  Wels.  504,  (negligence  of  servant) ; 
Ankeny  v.  Moffett,  1887,  37   Minn.  109 ;   33  N.  W.  320,  (injury  re- 
sulting from  fall   of    building  due  to  negligence  of  owners  or    their 
agents) ;  Horbach's  Admrs.  v.  Elder,  1851,  18  Pa.  St.  33,  (negligence  of 
servant).      See  Bailey  v.  Bussing,  1859,  28  Conn.  455,  459,  in  which 
ELLSWORTH,  J.,  said:    "We  must  look  for  personal  participation,  per- 
sonal culpability,  personal  knowledge.     If  we  do  not  find  these  cir- 
cumstances, but  perceive  only  a  liablity  in  the  eye  of  the  law,  growing 
out  of  a  mere  relation  to  the  perpetrator  of  the  wrong,  the  maxim  of 
law  that  there  is  no  contribution  among  wrongdoers  is  not  to  be  applied.", 

2  Vandiver  v.  Pollak,  1893,  97  Ala.  467 ;    12  So.  473 ;    19  L.  R.  A. 
628,  (levy  on  goods) ;  Farwell  v.  Becker,  1889,  129  111.  261 ;  21  N.  E. 
792 ;    6  L.  R.  A.  400 ;    16  Am.  St.  Rep.  267,  (attachment  of  goods) ; 
Jacobs  v.  Pollard,   1852,   10  Cush.   (Mass.)  287;    57  Am.  Dec.   105, 
(seizure  of  cattle  by  plaintiff  and  sale  by  defendant) ;  Smith  v.  Ayrault, 
1888,  71  Mich.  475;   39  N.  W.  724;    1  L.  R.  A.  311,  (infringement  of 
patent) ;    First  Nat.  Bank  v.  Avery  Planter  Co.,  1903,  69  Neb.  329 ; 
95  N.  W.  622;    111  Am.  St.  Rep.  541 ;    Schappel  v.  First  Nat.  Bank, 
1908,  80  Neb.  708;   115  N.  W.  317,  (attachment) ;   Acheson  v.  Miller, 
1853,  2  Ohio  St.  203 ;   59  Am.  Dec.  663,  (levy  on  goods).     See  Torpy 
v.  Johnson,  1895,  43  Neb.  882 ;  62  N.  W.  253,  (sale  of  liquor  to  habitual 
drunkard). 

403 


§  256]  4       CONSTRAINT  OF  AN  OBLIGATION  [Part  III 

Whether  the  rule  applies  to  cases  of  mere  negligence,  is  not 
settled.  The  House  of  Lords,  in  an  interesting  Scotch  case, 
enforced  contribution: 

Palmer  v.  Wick  &  Pulteneytown  Steam  Shipping  Co.,  [1894] 
A.  C.  318 :  Palmer,  a  stevedore,  was  engaged  in  discharging 
pig  iron  from  the  shipping  company's  vessel  when  one  of  his 
workmen  was  killed  by  the  fall  of  a  block,  part  of  the  ship's 
tackle.  The  tackle  was  defective  and  .was  negligently  used 
by  the  appellant.  A  joint  judgment  against  Palmer  and  the 
company  was  paid  in  full  by  the  latter,  which  then  brought 
this  action  for  contribution.  Lord  HERSCHELL,  L.C.  (p.  323) : 
"  It  is  not  necessary  in  this  appeal  to  decide  whether  there  can 
be  any  right  to  contribution  in  the  case  of  a  delict  proper  when 
the  liability  has  arisen  from  a  conscious  and  therefore  moral 
wrong,  nor  even  whether  in  every  case  of  quasi-delict  a  delin- 
quent may  obtain  relief  against  his  co-delinquent,  though  I 
see,  as  at  present  advised,  no  reason  to  differ  from  the  opinion, 
which  I  gather  my  noble  and  learned  friend  Lord  Watson  holds, 
that  such  a  right  may  exist.  .  .  . 

"Much  reliance  was  placed  by  the  learned  counsel  for  the 
appellant  upon  the  judgment  in  the  English  case  of  Merry- 
weatJier  v.  Nixan  [8  Term  R.  186].  The  reasons  to  be  found  in 
Lord  Kenyon's  judgment,  so  far  as  reported,  are  somewhat 
meager,  and  the  statement  of  the  facts  of  the  case  not  less  so. 
It  is  now  too  late  to  question  that  decision  in  this  country; 
but  when  I  am  asked  to  hold  it  to  be  part  of  the  law  of  Scot- 
land, I  am  bound  to  say  that  it  does  not  appear  to  me  to  be 
founded  on  any  principle  of  justice  or  equity,  or  even  of  public 
policy,  which  justifies  its  extension  to  the  jurisprudence  of 
other  countries.  There  has  certainly  been  a  tendency  to  limit 
its  application,  even  in  England.  .  .  .  The  doctrine  that  one 
tort-feasor  cannot  recover  from  another  is  inapplicable  to  a 
case  like  that  now  under  consideration." l 

1  But  see  The  Englishman  and  The  Australia,  [1895]  P.  212,  in 
which  BRUCE,  J.,  said  (p.  218) :  "I  do  not  think  that  the  observations 
[of  Lord  Hersehell]  were  intended  to  mean  that,  wherever  the  act 
done  by  joint  tort-feasors  was  not  in  itself  unlawful,  an  indemnity  is 
to  be  implied  from  the  mere  fact  that  one  tort-feasor  has  paid,  under 
compulsion,  the  whole  damages  arising  from  the  tort." 

404 


Chap.  XVIII]    RIGHT  OF  TORT-FEASOR  TO  CONTRIBUTION   [§  250 

The  courts  of  several  States,  also,  have  enforced  contribution.1 
On  the  other  hand,  there  are  a  number  of  authorities  which 
favor  the  view  that  cases  of  negligence  fall  within  the  rule  of 
no  contribution,  one  of  the  most  important  being  a  decision  of 
the  United  States  Supreme  Court : 

Union  Stock  Yard*  Co.  v.  Chicago,  etc.,  R.  Co.,  1905,  196  U.  S. 
217 :  25  S.  Ct.  226 :  Action  for  indemnity.  The  defendant  had 
delivered  to  the  plaintiff  a  defective  car,  the  defect  being  one 
that  was  discoverable  upon  reasonable  inspection.  A  servant 
of  the  plaintiff  was  injured  by  reason  of  the  defect  and  received 
a  judgment  against  the  plaintiff  for  damages  on  the  ground  that 
his  injury  was  caused  by  the  plaintiff's  negligence. 

Mr.  Justice  DAY  (p.  227) :  "The  case  then  stands  in  this 
wise :  The  railroad  company  and  the  terminal  company  have 
been  guilty  of  a  like  neglect  of  duty  in  failing  to  properly  in- 
spect the  car  before  putting  it  in  use  by  those  who  might  be 
injured  thereby.  .  .  .  The  terminal  company,  because  of  its 
fault,  has  been  held  liable  to  one  sustaining  an  injury  thereby. 
We  do  not  think  the  case  comes  within  that  exceptional  class 
which  permits  one  wrongdoer  who  has  been  mulcted  in  damages 
to  recover  indemnity  or  contribution  from  another."  2 

1  Nickerson  v.  Wheeler,  1875,  118  Mass.  295,   (liability  of  officers 
of  corporation  for  neglect  to  file  annual  certificate  required  by  law) ; 
Ankeny  ».  Moffett,  1887,  37  Minn.  109;    33  N.  W.  320,  (liability  for 
injury  resulting  from  fall  of  building  due  to  negligence  of  owners  or 
their  agents) ;    Armstrong  County  v.  Clarion  County,  1870,  66  Pa.  St. 
218;    5  Am.  Rep.  368,   (traveler  injured  as  result  of  negligence    of 
plaintiff  and  defendant  counties  in  maintenance  of  bridge) ;    Thweatt 
v.  Jones,  1823, 1  Rand.  (Va.)  328 ;  10  Am.  Dec.  538,  (tobacco  inspectors, 
by  mistake  or  negligence,  delivered  receipts  and  tobacco  to  person 
other  than  owner).     And  see   Mayberry  v.  Northern   Pacific  R.  Co., 
1907,  100  Minn.  79 ;  110  N.  W.  356 ;  Eaton  &  Prince  Co.  v.  Mississippi, 
etc.,  Trust  Co.,  1906,  123  Mo.  App.  117;    100  S.  W.  551,  (plaintiff's 
employee  fatally  injured  through  negligent  running  of  elevator,  while 
working  in  building  belonging  to  defendant :  statute  in  Missouri  allows 
contribution  between  codefendants  in  tort  actions  :   dictum  that  con- 
tribution would  be  allowed  in  this  case  at  common  law) ;   Gulf,  etc.,  R. 
Co.  v.  Galveston,  etc.,  R.  Co.,  1892,  83  Tex.  509 ;   18  S.  W.  956. 

2  Also  :  Atlanta,  etc.,  R.  Co.  v.  Southern,  etc.,  Co.,  1901, 107  Fed.  874, 
(C.  C.   Ga.) ;    Forsythe  v.  Los  Angeles  R.   Co.,  1906,  149   Cal.  569 ; 
87  Pac.  24;  Central  of  Georgia  R.  Co.  v.  Macon  R.&  Light  Co.,  1911, 
9  Ga.  App.  628;  71  S.  E.  1076;   Gregg  v.  Page  Belting  Co.,  1897,  69 

405 


§  257]  CONSTRAINT  OF  AN   OBLIGATION  [Part  III 

§  257.  Same :  Upon  principle.  —  As  a  matter  of  justice  be- 
tween individuals,  the  case  of  tort-feasors  is  not  distinguishable 
from  that  of  cocontractors.  Contribution  is  denied  in  the 
former  case,  however,  for  reasons  of  public  policy.  These  rea- 
sons, which  are  substantially  the  same  as  have  led  to  the  denial 
of  relief  to  parties  to  illegal  contracts,  are  stated  in  another 
section  (ante,  §  135).  As  to  persons  guilty  of  conscious  and 
willful  torts,  they  may  be  sufficient  (but  see  ante,  §  135). 
But  they  have  very  little  force  when  applied  to  persons  who 
are  innocent  of  moral  wrong.  Even  though  such  persons, 
as  a  result  of  negligence  or  misapprehension  of  their 
rights,  have  committed  a  tort,  they  cannot  upon  any  ade- 
quate ground  of  public  policy  be  denied  the  right  to  con- 
tribution.1 

§  258.  (4)  Right  of  tort-feasor  to  indemnity.  —  The  rules 
governing  contribution  between  tort-feasors  (ante,  §§  255,  256) 
apply,  mutatis  mutandis,  to  cases  of  indemnity.  Thus,  whether 
an  agent  who  has  committed  a  tort  under  the  direction  of  his 
principal  may  recover  indemnity  from  the  principal  depends 
upon  the  moral  responsibility  of  the  agent.  If  he  knew  or  ought 
to  have  known  that  his  act  was  wrongful  he  will  not  be  allowed 
indemnity.2  But  if  he  acted  in  good  faith  and  without  any  in- 
tention of  violating  another's  rights,  he  will  be  permitted  to  shift 
the  consequences  of  the  tort  to  the  shoulders  of  his  principal, 
where  as  between  the  two  it  should  justly  fall.3  Again,  while 

N.  H.  247;  46  Atl.  26;  Andrews  v.  Murray,  1861,  33  Barb.  (N.  Y. 
Sup.  Ct.)  354;  Galveston,  etc.,  R.  Co.  v.  Nass,  1900,  94  Tex.  255;  59 
S.  W.  870;  Texas,  etc.,  R.  Co.  v.  Corr,  1910,  Tex.  Civ.  App. 
130  S.  W.  185;  Walton,  Witten,  &  Graham  v.  Miller's  Admx.,  1909, 
109  Va.  210;  63  S.  E.  458;  132  Am.  St.  Rep.  908;  Tacoma  v.  Bon- 
nell,  1911,  65  Wash.  505 ;  118  Pac.  642;  36  L.  R.  A.  (N.  S.)  582. 

1  See  article  by  T.  W.  Reath,  "Contribution  between  Persons  jointly 
charged  for  Negligence  —  Merryweather  v.   Nixan,"    12  Harv.   Law 
Rev.  176. 

2  See  Nelson  v.  Cork,  1856,   17  111.  443 ;    Sutton  v.  Morris,  1898, 
102  Ky.  611 ;  19  Ky.  Law  Rep.  1654 ;  44  S.  W.  127 ;  Coventry  v.  Bar- 
ton, 1819,  17  Johns.  (N.  Y.)  142;  8  Am.  Dec.  376;  Culmer  v.  Wilson, 
1896,  13  Utah  129 ;  44  Pac.  833  ;  57  Am.  St.  Rep.  713. 

3  Adamson  v.  Jarvis,   1827,  4  Bing.  66,   (conversion  of  goods  by 
plaintiff,  an  auctioneer,  under  order  of  defendant) ;   Betts  v.  Gibbons, 

406 


Chap.  XVIII]      RIGHT  OF  TORT-FEASOR  TO  INDEMNITY       [§  258 

one  who  has  actually  authorized  the  commission  of  a  tort  by  his 
agent  or  servant  is  obviously  not  entitled  to  indemnity,  one  who 
has  not  authorized  a  wrongful  act  but  is  held  liable  to  the  per- 
sons injured  merely  because  of  his  relationship  to  the  agent  or 
servant  who  committed  it,  will  be  allowed  to  seek  indemnity.1 
It  should  be  added  that  indemnity  is  frequently  sought  where 
the  relation  of  principal  and  agent  or  master  and  servant  does 
not  exist,  but  where,  nevertheless,  as  between  the  tort-feasors, 
one  is  primarily  responsible  for  the  wrong  and  ought  to  bear  the 
consequences.  The  case  of  injuries  resulting  from  a  negligently 
maintained  sidewalk  is  typical.  Both  the  property  owner  and 
the  municipality  are  legally  responsible  to  the  person  injured, 
but  as  between  the  two  the  blame  lies  at  the  door  of  the  owner. 
In  this  and  similar  cases,  if  the  party  who  is  not  actually  or 
primarily  at  fault  is  compelled  to  respond  in  damages,  he  may 
have  indemnity  from  the  other.2  So  far  is  this  principle  carried 


1834,  2  Ad.  &  E.  57,  (conversion  of  goods  by  agent  under  order  of 
principal) ;  Moore  v.  Appleton,  1855,  26  Ala.  633,  (plaintiff  dispos- 
sessed third  person  under  authority  of  defendant) ;  Grower  v.  Emory, 
1841,  18  Me.  79,  (attachment  of  goods  by  deputy  sheriff) ;  Culmer  v. 
Wilson,  1896,  13  Utah  129 ;  44  Pac.  833 ;  57  Am.  St.  Rep.  713,  (tres- 
pass by  agent  or  trustee)  ;  Hoggan  v.  Cahoon,  1903,  26  Utah  444 ; 
73  Pac.  512 ;  99  Am.  St.  Rep.  837,  (trespass  by  agent  in  seizing  goods 
upon  which  defendant  claimed  to  have  a  chattel  mortgage). 

1  Bradley  v.  Rosenthal,  1908,  154  Cal.  420 ;   97  Pac.  875 ;    129  Am. 
St.  Rep.  171,  (negligence  of  defendant  Rosenthal  in  selecting  telephone 
poles) ;    Bailey  v.  Bussing,  1859,  28  Conn.  455,   (negligence  of  stage 
driver) ;  Georgia,  etc.,  R.  Co.  v.  Jossey,  1898,  105  Ga.  271 ;  31  S.  E.  179, 
(negligence  of  baggage  master  in  delivering  trunk  at  wrong  station) ; 
Grand  Trunk  R.  Co.  v.  Latham,  1874,  63  Me.  177,  (misconduct  of  con- 
ductor to  passenger) ;    Costa  v.  Yochim,  1900,  104  La.  170 ;    28  So. 
992,  (negligence  of  driver) ;   Lane  v.  Fenn,  1909,  65  Misc.  R.  336 ;   120 
N.  Y.  Supp.  237 ;   San  Antonio  v.  Smith,  1900,  94  Tex.  266 ;   59  S.  W. 
1109,   (tenants  of  city  sewer  farm  improperly  diverting  sewage  into 
creek) ;   Kampmann  v.  Rothwell,  1908,  101  Tex.  535 ;   109  S.  W.  1089 ; 
17  L.  R.  A.  (N.  S.)  758,  (negligence  of  contractor  in  building  sidewalk) ; 
Gaffner  v.  Johnson,   1905,  39  Wash.  437;    81   Pac.  859;    Glover  v. 
Richardson  &  Elmer  Co.,  1911,  64  Wash.  403;   116  Pac.  861. 

2  Washington  Gas  Light  Co.  v.  District  of  Columbia,  1896,  161  U.  S. 
316 ;    16  S.  Ct.  564,  (municipality  obliged  to  pay  damages  resulting 
from  defective  sidewalk) ;   Schneiders.  Augusta,  1903,  118  Ga.  610; 
45  S.  E.  459,    (municipality   v.  property  owner) ;    Gridley  v.  City  of 

407 


§  258]  CONSTRAINT   OF   AN   OBLIGATION  [Part  III 

that  it  is  declared  that  "  as  to  the  two  negligent  parties, 
if  the  negligence  of  one  was  merely  passive,  or  was  such  as  only 
to  produce  the  occasion,  and  the  other  negligent  party  was  the 

Bloomington,  1873,  68  111.  47,  (city  was  compelled  to  pay  damages 
resulting  from  defective  sidewalk) ;  Canton  v.  Torrance,  1909,  151 
111.  App.  129,  (municipality  v.  property  owner) ;  McNaughton  t>. 
Elkhart,  1882,  85  Ind.  384,  (city  v.  abutting  owner) ;  Veazie  v.  Penob- 
scot  R.  Co.,  1860,  49  Me.  119,  (city  v.  railroad  for  injuries  resulting 
from  obstructing  highway) ;  Baltimore,  etc.,  R.  Co.  v.  Howard  County, 
1909,  111  Md.  176;  73  Atl.  656,  off.  on  second  appeal  1910,  113  Md. 
404;  77  Atl.  930,  (railroad  had  rendered  highway  dangerous  by  re- 
locating tracks ;  held  liable  though  county  commrs.  knew  of  facts) ; 
Gray  v.  Boston  Gas  Light  Co.,  1873,  114  Mass.  149;  19  Am.  Rep. 
324,  (defendant,  without  permission  of  plaintiff,  attached  to  plaintiff's 
chimney  a  wire  which  ultimately  caused  it  to  fall  and  injure  a  horse 
and  wagon ;  plaintiff  was  obliged  to  pay  damage  and  brought  action 
for  indemnity);  Churchill  v.  Holt,  1879,  127  Mass.  165;  34  Am. 
Rep.  355,  (occupant  of  building  compelled  to  pay  damages  resulting 
from  open  hatchway  left  open  by  defendant's  servant) ;  Boston  v. 
Coon,  1900,  175  Mass.  283 ;  56  N.  E.  287,  (municipality  v.  contractors 
building  on  lot  abutting  on  city  street) ;  City  of  Detroit  v.  Chaffee, 
1888,  70  Mich.  80 ;  37  N.  W.  882,  (city  v.  property  owner) ;  Minneap- 
olis Mill  Co.  v.  Wheeler,  1883,  31  Minn.  121 ;  16  N.  W.  698,  (plaintiff 
as  owner  of  premises  obliged  to  pay  damages  resulting  from  defective 
bridge  which  defendant  should  have  kept  in  repair) ;  Independence  v. 
Missouri,  etc.,  R.  Co.,  1901,  86  Mo.  App.  585,  (municipality  v.  rail- 
road :  defective  crossing) ;  Oceanic  Steam  Nav.  Co.  v.  Compania 
Transatlantica  Espanola,  1892,  134  N.  Y.  461 ;  31  N.  E.  987 ;  30  Am. 
St.  Rep.  685,  (lessee  of  pier  obliged  to  pay  damages  resulting  from 
defective  door  which  sub-lessee  should  have  repaired)  ;  Phoenix 
Bridge  Co.  v.  Creem,  1905,  102  App.  Div.  354;  92  N.  Y.  Supp.  855, 
(contractor  v.  subcontractor) ;  New  York  v.  Corn,  1909,  133  App.  Div. 
1 ;  (  117  N.  Y.  Supp.  514,  (city  v.  property  owner) ;  New  York  v. 
Hearst,  1911,  142  App.  Div.  343 ;  126  N.  Y.  Supp.  917,  (city  v.  cam- 
paign comm.  for  negligent  discharge  of  fireworks) ;  Gregg  v.  Wil- 
mington, 1911,  155  N.  C.  18;  70  S.  E.  1070,  (city  v.  contractor  using 
street)  ;  Grand  Forks  v.  Paulsness,  1909,  19  N.  D.  293 ;  123  N.  W. 
878,  (city  v.  contractor  using  street) ;  Ashley  v.  Lehigh,  etc.,  Coal 
Co.,  1911,  232  Pa.  425;  81  Atl.  442,  (city  v.  abutting  owner); 
Corsicana  v.  Tobin,  1900,  23  Tex.  Civ.  App.  492 ;  57  S.  W.  319, 
(city  v.  abutting  owner) ;  Pullman  Co.  v.  Hoyle,  1909,  52  Tex. 
Civ.  App.  534;  115  S.  W.  315,  (R.  Co.  v.  Pullman  Co.,  for  causing 
passenger  to  alight  before  arrival  at  station) ;  Seattle  v.  Puget  Sound 
Imp.  Co.,  1907,  47  Wash.  22 ;  91  Pac.  255,  (city  v.  abutting  owner). 
See  Nashua  Iron  &  Steel  Co.  v.  Worcester,  etc.,  R.  Co.,  1882,  62 
N.  H.  159,  where  it  was  held  that  a  plaintiff  who  by  reason  of  his  and 
the  defendant's  negligence  has  been  compelled  to  pay  damages  to 

408 


Chap.  XVIII]      NATURE  OF  THE  TORT-FEASOR's  RIGHT       [§  259 

active  perpetrator  of  the  wrong,  the  former  may  recover  over 
against  the  latter."  1 

§  259.  (5)  Nature  of  the  tort-feasor's  right  to  indemnity  or 
contribution.  —  In  so  far  as  the  right  of  a  tort-feasor  to  indemnity 
or  contribution  has  been  recognized,  it  is  enforced  both  in  equity 
and  at  law.  When  there  is  no  express  contract,  it  is  commonly 
rested  upon  the  theory  of  an  implied  contract  between  the 
parties.  Indeed,  in  an  English  admiralty  case  it  is  declared,  in 
substance,  that  unless  the  circumstances  raise  an  implied  prom- 
ise the  right  to  indemnity  does  not  exist.2  But  in  some  cases,  as 
for  example  where  the  wrong  consists  of  a  mere  unintentional 
neglect  of  duty,  there  can  hardly  be  said  to  be  an  implication 
of  a  genuine  promise  of  indemnity  or  contribution.  In  such 
cases,  the  obligation  may  well  be  rested  upon  quasi  contractual 
principles,  for  in  so  far  as  one  tort-feasor  pays  what  in  equity 
and  good  conscience  another  tort-feasor  ought  to  pay,  the  latter 
receives  a  benefit  at  the  expense  of  the  former,  the  retention  of 
which  is  unjust. 

another,  may  recover  indemnity,  although  but  for  his  own  negligence 
the  injury  would  not  have  happened,  if  at  the  time  it  occurred  he 
could  not,  and  the  defendant  could,  have  prevented  it  by  ordinary 
care.  Cf.  Union  Stock  Yards  Co.  v.  Chicago,  etc.,  R.  Co.,  1905,  196 
U.  S.  217 ;  25  S.  Ct.  226 ;  Wilhelm  v.  Defiance,  1898,  58  Ohio  St.  56 ; 
50  N.  E.  18 ;  40  L.  R.  A.  294 ;  65  Am.  St.  Rep.  745. 

1  Austin,  etc.,  R.  Co.  v.  Faust,  1911,       Tex.  Civ.  App.      ;  133  S.  W. 
449,  453. 

2  The  Englishman  and  The  Australia,  [1895]  P.  212. 


409 


PART  IV 

ACTION  FOR  RESTITUTION  AS  ALTERNATIVE  REMEDY 
FOR  REPUDIATION  OR  BREACH  OF  CONTRACT  AND 
FOR  TORT 

CHAPTER  XIX 

ACTION   FOR   RESTITUTION   AS   ALTERNATIVE   REMEDY  FOR 
REPUDIATION   OR   BREACH   OF   CONTRACT 

§  260.     In  general :   Is  the  obligation  quasi  contractual  ? 
§  261.     (I)  Origin  of  the  doctrine. 
§  262.     (II)  Scope  of  the  doctrine : 

(1)  Application  to  cases  of  goods  sold  or  services  rendered. 
§  263.         (2)  Application  to  cases  of  repudiation  and  to  cases  of  sub- 
stantial breach. 

§  264.         (3)  Application  to  cases  of  contracts  under  seal. 
§  265.     (Ill)  Restitution  by  plaintiff  as  condition  precedent. 
§  266.     (IV)  What  constitutes  an  election. 

§  267.     (V)  The  necessity  of  notice  or  demand :  Statute  of  limitations. 
§  268.     (VI)  Measure  of  recovery. 
§  269.  Same :  Effect  of  settlement  or  payment  pro  tanto. 

§  260.  In  general :  Is  the  obligation  quasi  contractual  ?  —  It 
is  a  general  rule  that  upon  the  repudiation,  or  (in  America)  the 
substantial  breach,  of  a  contract  by  one  party,  the  other  may 
elect  to  "  rescind  the  contract  "  and  recover  the  value  of  his 
performance.  The  use  of  the  word  "  rescission  "  in  this  con- 
nection is  unfortunate  and  confusing.  In  its  true  meaning 
rescission  signifies  the  abrogation  or  annulment  of  a  contract 
either  by  decree  of  court  or  mutual  consent  of  the  parties.  No 
such  abrogation  or  annulment  is  essential  to  the  right  to  res- 
titution, though  courts  have  sometimes  been  misled  by  the  term 
"  rescission "  to  believe  otherwise.  What  the  term  really 
means,  when  used  with  reference  to  the  right  to  restitution,  is 

410 


Chap.  XIX]  ORIGIN   OF  THE   DOCTRINE  [§  261 

that,  upon  the  repudiation  or  substantial  breach  of  a  contract, 
the  injured  party  may  elect  to  disregard  his  contract  —  that  is, 
to  quit  performance  on  his  own  side,  refuse  to  accept  further 
performance  by  the  other  party,  and  relinquish  his  right  to 
compensatory  damages  measured  by  reference  to  the  terms  of 
the  contract, —  and  demand  restitution  in  value  for  what  he 
has  done.1 

This  right  to  restitution  would  seem  to  be  in  reality  nothing 
more  than  an  alternative  remedial  right  arising  from  the  viola- 
tion of  the  contract.  Accurately  speaking,  therefore,  it  is  not 
a  quasi  contractual  right.  The  only  primary  obligation  is  the 
obligation  to  perform  the  contract ;  the  only  primary  right  the 
right  to  such  performance.  As  in  the  case  of  the  action  for  res- 
titution as  an  alternative  remedy  for  certain  torts  (post,  §  270 
et  seq.),  however,  it  has  been  commonly  regarded  as  quasi 
contractual,  and  for  that  reason  may  be  considered  in  this 
treatise. 

§  261.  (I)  Origin  of  the  doctrine.  —  In  the  earlier  days  of 
the  common  law  the  only  remedy  for  breach  of  contract  was  the 
action  for  compensatory  damages.  The  right  to  elect  resti- 
tution instead  of  compensation  appears  to  have  been  recognized 
for  the  first  time  in  1721 ; 2  but  it  was  not  thoroughly  established 
until  Lord  MANSFIELD'S  day.  In  most  of  the  early  cases  the 
action  was  for  the  recovery  of  money  paid  on  contracts  subse- 
quently repudiated  by  the  defendant.  It  was  in  a  case  of  this 
sort,  Towers  v.  Barrett,3  that  Lord  MANSFIELD  said :  "  I  am 
a  great  friend  of  the  action  for  money  had  and  received;  it  is 
a  very  beneficial  action,  and  founded  on  principles  of  eternal 


1  "A  fallacy  may  possibly  lurk  in  the  use  of  the  word  'rescission.' 
It  is  perfectly  true  that  a  contract,  as  it  is  made  by  the  joint  will  of 
two  parties  can  only  be  rescinded  by  the  joint  will  of  the  two  parties,  but 
we  are  dealing  here,  not  with  the  right  of  one  party  to  rescind  the  con- 
tract, but  with  his  right  to  treat  a  wrongful  repudiation  of  the  contract 
by  the  other  party  as  a  complete  renunciation  of  it."  -  —  BOWEN,  L.J., 
in  Mersey  Steel  &  Iron  Co.  v.  Naylor,  1882,  9  Q.  B.  D.  648,  671. 

2  Dutch  v.  Warren,  1721,  1  Str.  406,  (money  advanced  to  buy  stock) ; 
Anon.,  1721,  1  Str.  407,  (money  advanced  to  buy  stock). 

3  1786,  1  Term  R.  133,  134. 

411 


§  262]  RESTITUTION   AS   ALTERNATIVE   REMEDY  [Part  IV 

justice."  This  suggests  the  probable  reason  for  permitting  an 
election  —  a  feeling  that  the  plaintiff  had  at  least  lost  his  money 
and  that  the  return  of  his  money  was  a  simpler  adjustment  of 
rights  than  the  assessment  of  the  damages  suffered  by  the  plain- 
tiff as  a  result  of  the  refusal  of  the  defendant  to  perform  his 
contract.  It  is  noteworthy  that  while  the  remedy  of  restitution 
was  not  permitted  by  the  Roman  law  it  was  allowed  by  the 
Code  Napoleon,  and  has  recently  become  almost  uniformly 
available  in  Germany.1 

§  262.  (II)  Scope  of  the  doctrine :  (1)  Limited  application  to 
cases  of  goods  sold  or  services  rendered.  —  The  doctrine  has  been 
invoked  most  frequently  in  the  recovery  of  money  paid.2  It 

1  See  Professor  Williston,  "Dependency  of  Mutual  Promises  in  the 
Civil  Law,"  13  Harv.  Law  Rev.  84,  94,  95 ;   Wald's  Pollock,  "  Con- 
tracts" (Williston's  ed.),  pp.  346,  347. 

2  Money  paid  for  land.     Squire  v.  Todd,  1808,  1  Camp.  293  ;  Bart- 
lett  v.  Turchin,  1815,  6  Taunt.  259 ;   Gosbell  v.  Archer,  1835,  4  Nev.  & 
Man.  485 ;   Flinn  v.  Barber,  1879,  64  Ala.  193 ;  Worley  v.  Nethercott, 
1891,  91  Cal.  512;    27  Pac.  767;    25  Am.  St.  Rep.  209;    Richter  v. 
Union  Land  Co.,  1900,  129  Cal.  367;    62  Pac.  39,  (money  paid  for 
water  rights);   Carter  v.  Fox,  1909,  11  Cal.  App.  67;    103  Pac.  910; 
Wrayton  ».  Naylor,  1894,  24  Can.  S.  C.  295 ;   Thresher  v.  Stonington 
Bank,  1896,  68  Conn.  201 ;    36  Alt.  38 ;    Payne  v.  Pomeroy,  1892,  21 
D.  C.  243;  Kurd  v.  Denny,  1855,  16  111.  492;  Trinkle  v.  Reeves,  1861, 
25  111.  214 ;   76  Am.  Dec.  793 ;   Smith  v.  Treat,  1908,  234  111.  552 ;   85 
N.  E.  289;  Dantzeiser  v.  Cook,  1872,  40  Ind.  65;   Wilhelm  v.  Fimple, 
1870,  31  la.  131 ;    7  Am.  Rep.  117;   Kimball  v.  Bell,  1892,  47  Kan.  757  ; 
28  Pac.  1015 ;   Doherty  v.  Dolan,  1876,  65  Me.  87 ;   20  Am.  Rep.  677 ; 
Ballou  v.  Billings,  1884,  136  Mass.  307;    Weaver  v.  Aitcheson,  1887, 
65  Mich.  285 ;   32  N.  W.  436 ;   Morrison  v.  Ives,  1845,  4  Smed.  &  M. 
(12  Miss.)  652 ;  Langford  v.  Caldwell,  1871,  48  Mo.  508 ;   Dakota,  etc., 
Co.  v.  Price,  1887,  22  Neb.  96 ;   34  N.  W.  97 ;   Reddington  v.  Henry, 
1869,  48  N.  H.  273 ;   Weaver  v.  Bently,  1803,  1   Caines   (N.  Y.)  47 ; 
Freer  v.  Denton,  1875,  61  N.  Y.  492 ;  Lewis  v.  Brinkley,  1858,  50  N.  C. 
295 ;  Kicks  v.  State  Bank,  1904,  12  N.  D.  576 ;  98  N.  W.  408 ;  Stickter 
v.  Guldin,  1858,  30  Pa.  St.  114;   Wood  v.  Mason,  1865,  42  Tenn.  (2 
Cold.)  251 ;   House  v.  Kendall,  1881,  55  Tex.  40;  Newberry  v.  Ruffin, 
1903,  102  Va.  73;   45  S.  E.  733;   Riverside  Residence  Co.  v.  Husted, 
1909,  109  Va.  688 ;  64  S.  E.  958 ;  Tallensen  v.  Gunderson,  1853,  1  Wis. 
113. 

Money  paid  for  goods.  Towers  v.  Barrett,  1786,  1  Term  R.  133 ; 
Giles  v.  Edwards,  1797,  7  T.  R.  181 ;  Biggerstaff  v.  Rowatt's  Wharf, 
[1896]  2  Ch.  93 ;  Nash  v.  Towne,  1866,  5  Wall.  (U.  S.)  689 ;  Campbell 
Co.  ».  Marsh,  1894,  20  Col.  22 ;  36  Pac.  799 ;  Barr  v.  Logan,  1848, 

412 


Chap.  XIX]  SCOPE  OF  THE   DOCTRINE  [§  262 

has  also  been  applied,  however,  to  cases  of  goods  sold l  or 
services  rendered ; 2  but  with  this  important  limitation  —  that 

5  Harr.  (Del.)  52 ;    Winn  ».  Morris,  1894,  94  Ga.  452 ;    20  S.  E.  339  ; 
Miner  v.  Bradley,  1839,  22  Pick.  (Mass.)  457 ;   Phares  v.  Jaynes,  1906, 
118  Mo.  App.  546;   94  S.  W.  585;   Danforth  v.  Dewey,  1824,  3  N.  H. 
79;    Meader  v.  Cornell,  58  N.  L.  J.  375;    33  Atl.  960;    Raymond  v. 
Bearnard,  1815,  12  Johns.  (N.  Y.)  274 ;  7  Am.  Dec.  317  ;  Bier  v.  Bash, 
1905,  107  App.  Div.  429 ;   95  N.  Y.  Supp.  281,  (aff.  1906,  186  N.  Y. 
565;   79  N.  E.  1101) ;    Smethurst  v.  Woolston,  1842,  5  Watts  &  Serg. 
(Pa.)  106.     And  see  cases  of  rescission  for  breach  of  warranty,  Williston, 
"Sales,"  §608. 

Money  paid  for  insurance.  Black  v.  Supr.  Council,  Amer.  Legion 
of  Honor,  1903,  120  Fed.  580,  (C.  C.  Ind.),  aff.  123  Fed.  650;  59  C.  C. 
A.  414 ;  Van  Werden  v.  Equitable  Life  Assur.  Co.,  1896,  99  la.  621  ; 
68  N.  W.  892 ;  McKee  v.  Phoenix  Ins.  Co.,  1859,  28  Mo.  383 ;  75  Am. 
Dec.  129 ;  American  Life  Ins.  Co.  v.  McAden,  1885,  109  Pa.  St.  399 ; 
1  Atl.  256.  Contra:  Phoenix  Mut.  Life  Ins.  Co.  v.  Baker,  1877,  25 
111.  410;  Continental  Life  Ins.  Co.  v.  Hauser,  1887,  111  Ind.  266; 
12  N.  E.  479.  See  post,  §  265. 

1  Bartholomew  v.  Markwick,  1864,  15  C.  B.  N.  S.  711 ;   Ankeny  v. 
Clark,  1893,  148  U.  S.  345 ;    13  S.  Ct.  617 ;  United  States  v.  Molloy, 
1904,  127  Fed.  953 ;  62  C.  C.  A.  585 ;  Johnson  Forge  Co.  v.  Leonard, 

1902,  3  Penn.  (Del.)   342 ;    51   Atl.  305 ;   57  L.  R.  A.  225 ;    94  Am. 
St.  Rep.  86;    Hess  Co.  v.  Dawson,  1894,  149  111.  138;  36  N.  E.  557; 
Smith  v.  Keith  &  Perry  Coal  Co.,  1889,  36  Mo.  App.  567 ;   Thomp- 
son v.  Gaffey,  1897,  52  Neb.  317 ;   72  N.  W.  314 ;   Brown  v.  Mahurin, 
1859,  39  N.  H.   156 ;    Kokomo  Strawboard  Co.  v.  Inman,  1892,  134 
N.  Y.  92;    31  N.  E.  248;    Wellston  Coal  Co.  v.  Franklin  Paper  Co., 
1897,  57  Ohio  St.   182;   48  N.  E.  888;    Tucker  v.  Billing,  1881,  3 
Utah  82 ;   5  Pac.  554. 

2  Mayor  v.  Pyne,  1825,  3  Bing.  285 ;  Planch6  ».  Colburn,  1831,  8 
Bing.  14 ;  Prickett  v.  Badger,  1856,  1  C.  B.  N.  S.  295 ;  Clay  v.  Yates, 
1856,  1  Hurl.  &  Nor.  73 ;    Chicago  v.  Tilley,  1880,   103  U.  S.  146 ; 
Fowler  v.  Armour,  1854,  24  Ala.  194 ;  Webster  v.  Enfield,  1848,  5  Gilm. 
(10  111.)  298;  County  of  Jackson  v.  Hall,  1870,  53  IU.  440;    Anglo- 
Wyoming  Oil  Fields  v.  Miller,  1905,  117  111.  App.  552;    aff.  216  111. 
272;    74  N.  E.  821 ;    Hoagland  v.  Moore,  1828,  2  Blackf.   (Ind.)  167; 
Ottoway  v.  Milroy,  1909,  144  la.  631 ;   123  N.  W.  467 ;  Jenson  v.  Lee, 

1903,  67  Kan.  539  ;  73  Pac.  72  ;  Wright  v.  Haskell,  1858,  45  Me.  489  ; 
North  v.  Mallory,   1902,  94  Md.  305 ;   51  Atl.  89 ;   Brown  v.  Wood- 
bury,  1903,  183  Mass.  279 ;    67  N.  E.  327 ;    Hemminger  v.  Western 
Assur.  Co.,  1893,  95   Mich.  355 ;   54  N.  W.  949 ;   Siebert  v.  Leonard, 
1871,    17    Minn.    433;     McCullough   v.    Baker,    1871,  47  Mo.   401; 
Moore  v.  Board  of  Regents,  1908,  215  Mo.  705;    115  S.  W.  6;  Cook 

6  Woldson  v.  Gallatin  R.  Co.,  1903,  28  Mont.  509 ;    73  Pac.   131 ; 
Thompson  v.  Gaffey,  1897,  52  Neb.   317 ;    72  N.  W.  314 ;  Stephen  v. 
Camden  &  Phila.  Soap  Co.,  1907,  75  N.  J.  L.  648 ;  68  Atl.  69 ;  Person 

413 


§  262]  RESTITUTION   AS   ALTERNATIVE   REMEDY        [Part  IV 

where  the  injured  party  has  fully  performed  before  the  repudia- 
tion or  breach  occurs,  the  right  to  restitution  is  not  recognized.1 
If  such  full  performance  entitles  the  injured  party,  under  the 
contract,  to  a  liquidated  sum  of  money,  i.e.  raises  a  debt,  he 
may,  it  is  true,  sue  in  indebitatus  assumpsit,2  but  the  measure 
of  his  recovery  is  what  the  defendant  promised  to  pay  him,  not 
what  the  goods  or  services  are  reasonably  worth.3 

v.  Stoll,  1902,  72  App.  Div.  141 ;  76  N.  Y.  Supp.  324 ;  aff.  174  N.  Y. 
548 ;  67  N.  E.  1089 ;  Derby  ».  Johnson,  1848,  21  Vt.  17 ;  Preble  v. 
Bottom,  1855,  27  Vt.  249. 

1  Anderson  v.  Rice,  1852,  20  Ala.  239;    Campbell  v.  Dist.  of  Col., 
1876,  2  MacAr.  (D.  C.)  533;    Reams  v.  Wilson,  1908,  147  N.  C.  304; 
60  S.  E.  1124;  Shropshire  v.  Adams,  1905,  40  Tex.  Civ.  App.  339; 
89  S.  W.  448. 

2  Stone  v.  Rodgers,  1837,  2  Mees.  &  Wels.  443 ;  Bank  of  Columbia 
v.  Patterson,  1813,  7  Cranch  (U.  S.)  299;    Dermott  v.  Jones,  1864,  2 
Wall.  (U.  S.)  1;    Hunter  v.  Waldron,  1845,  7  Ala.  753;    Massey  v. 
Greenabaum  Bros.,  1904,  5   Penn.  (Del.)  20;    58  Atl.  804;    Shepard 
v.  Mills,  1898,  173  111.  223 ;  50  N.  E.  709 ;  Peterson  v.  Pusey,  1908,  237 
111.  204;    86  N.  E.  692;    Shilling  v.  Templeton,  1879,  66  Ind.  585; 
Rogers  ».  Brown,  1908,  103  Me.  478 ;    70  Atl.  206 ;   Southern  Bldg., 
etc.,  Asso.  v.  Price,  1898,  88  Md.  155 ;  41  Atl.  53 ;   42  L.  R.  A.  206 ; 
Nicol  v.  Fitch,  1897,  115  Mich.  15;   72  N.  W.  988;    69  Am.  St.  Rep. 
542 ;    Morin  v.  Robarge,  1903,  132  Mich.  337 ;    93  N.  W.  886 ;    New 
Orleans,  etc.,  R.  Co.  v.  Pressley,  1871,  3  Morris  (45  Miss.)  66 ;  Barnett 
v.  Sweringen,  1898,  77  Mo.  App.  64 ;   Hosley  v.  Black,  1863,  28  N.  Y. 
438.     And  see  Keener,    "  Quasi-Contracts,"   p.   301 ;  Wald's  Pollock, 
"Contracts"  (Williston's  ed.),  P-  337. 

If,  however,  the  seller  of  goods  agrees  to  take  the  buyer's  bill  or 
note,  payable  at  a  future  day,  he  cannot  bring  indebitatus  assumpsit 
upon  the  buyer's  failure  to  give  the  bill  or  note,  but  must  wait  until 
the  period  of  credit  expires.  Mussen  v.  Price,  1803, 4  East  147  ;  Dutton 
0.  Solomonson,  1803,  3  Bos.  &  Pul.  582;  Manton  0.  Gammon,  1880, 
7  111.  App.  201 ;  Hall  v.  Hunter,  1854,  4  G.  Greene  (la.)  539;  Carson 
v.  Allen,  1838,  6  Dana  (36  Ky.)  395;  Hanna  v.  Mills,  1839,  21  Wend. 
(N.  Y.)  90;  34  Am.  Dec.  216;  Yale  v.  Coddington,  1839,  21  Wend. 
(N.  Y.)  175.  And  see  Maas  v.  Montgomery  Iron  Wks.,  1889,  88  Ala. 
323  ;  6  So.  701.  But  see,  contra,  Stocksdale  v.  Schuyler,  1890,  55  Hun 
610 ;  29  N.  Y.  St.  Rep.  380 ;  8  N.  Y.  Supp.  813,  aff.  130  N.  Y.  674 ; 
29  N.  E.  1034  ;  Tyson  v.  Doe,  1843,  15  Vt.  571 ;  Foster  v.  Adams,  1888, 
60  Vt.  392  ;  15  Atl.  169 ;  6  Am.  St.  Rep.  120.  If  the  buyer  agrees  to 
give  the  bill  or  note  of  a  third  person  and  fails  so  to  do,  indebitatus  as- 
sumpsit may  be  brought  at  once.  See  Hall  v.  Hunter,  1854,  4  G.  Greene 
(la.)  539. 

J  Dermott  v.  Jones,  1864,  2  Wall.  (U.  S.)  1 ;  Pusey  &  Jones  Co.  v. 
Dodge,  1900,  3  Penn.  (Del.)  63  ;  49  Atl.  248 ;  Campbell  v.  Dist.  of  Col., 

414 


Chap.  XIX]  SCOPE    OF   THE   DOCTRINE  [§  262 

There  seems  to  be  no  valid  reason  for  this  limitation.  Pos- 
sibly the  fact  that  the  assessment  of  compensatory  damages 
is  likely  to  be  less  difficult  where  the  breach  occurs  after  the 
defendant  has  received  full  performance  accounts  for  it  in  some 
degree.  But  certainly  it  is  quite  as  easy  to  assess  compensatory 
damages  where  the  plaintiff's  full  performance  consists  of  the 
payment  of  money  as  where  it  consists  of  the  delivery  of  goods 
or  the  rendition  of  services ;  yet  in  the  former  case  the  remedy 
of  restitution  is  allowed.  In  criticism  of  the  limitation,  Pro- 
fessor Keener  says : l 

"While  it  is  true  that  the  plaintiff  should,  if  he  so  desire,  be 
allowed  to  sue  in  debt  or  in  indebitatiLS  assumpsit,  simply  to 
recover  the  contract  price,  treating  the  performance  on  his  side 
as  creating  a  debt,  still  it  would  seem  that  logically  he  should  be 
allowed  to  claim  restitution  in  value  in  such  cases  as  much  as  in 
the  case  where  he  seeks  and  is  allowed  to  recover  not  the  money, 
which  he  in  fact  paid  the  defendant,  but  an  equivalent  sum  of 
money.  When  the  plaintiff  paid  the  money  he  did  not  expect 
its  return,  but  its  equivalent;  and  the  promised  performance 
by  the  defendant,  which  subsequent  events  have  shown  to  be 
less  in  value  than  the  parties  supposed,  was  treated  by  the 
parties  as  the  equivalent  of  the  plaintiff's  money ;  and  yet  the 
plaintiff  is  allowed,  regardless  of  this  fact,  to  recover  from  the 
defendant  the  full  amount  paid.  But  if  a  defendant  in  default 
is  not  allowed  to  return  a  sum  less  than  the  amount  received  by 
him  where  he  has  received  money  from  the  plaintiff,  why  should 
he  be  allowed  to  return  less  than  the  actual  value  of  the  services 
or  property  received  by  him  under  a  contract  which  he  has  not 
performed  ?  "  2 

Another  illogical  limitation  that  has  been  widely  accepted  is 
that  if,  by  the  terms  of  the  contract,  the  injured  party,  in  return 
for  his  goods  or  services,  is  to  receive,  not  money,  but  goods  or 

1876,  2  MacAr.  (D.  C.)  533 ;  Barnett  v.  Sweringen,  1898,  77  Mo.  App. 
64.  Keener,  " Quasi-Contracts,"  p.  301 ;  Wald's  Pollock,  "Contracts, " 
(Williston's  ed.)  p.  337.  And  see  other  cases  in  preceding  note. 

1  "Quasi-Contracts,"  pp.  301,  302. 

2  And  see  Wald's  Pollock,  "Contracts"    (Williston's  ed.),  pp.  336, 
337. 

415 


§  262]  RESTITUTION   AS   ALTERNATIVE   REMEDY        [Part  IV 

services,  he  may  not  elect  to  sue  for  restitution  but  must  rely 
upon  his  action  for  damages.1  This  indicates  a  misconception 
of  the  theory  of  the  action  for  restitution.  Fortunately  there 
is  authority  to  the  contrary,2  and  moreover,  it  seems  that  the 
limitation  is  not  applicable  to  cases  in  which  goods  or  services 
are  contracted  for  at  a  certain  money  price  which  the  buyer 
has  the  option  to  pay  in  goods  or  services.3 

In  the  case  of  land  conveyed,  there  seems  to  be  no  alternative 
remedy  at  law,  but  in  some  cases  restitution  in  specie  may  be 
enforced  in  equity.4 

1  Harrison  v.  Luke,  1845,  14  Mees.  &  W.  139 ;    (cf.  Keys  v.  Har- 
wood,  2  C.  B.  905) ;   Anderson  v.  Rice,  1852,  20  Ala.  239 ;   Bernard  v. 
Dickens,  1860,  22  Ark.  351 ;    Cockran  v.  Tatum,  1826,  3  T.  B.  Mon. 
(19  Ky.)  404;    Slayton  v.  McDonald,  1881,  73  Me.  50;    Pierson  v. 
Spaulding,  1886,  61  Mich.  90;  27  N.  W.  865;  Mitchell  v.  Gile,  1841, 
12  N.  H.  390;   Brooks  v.  Scott,  1811,  2  Munf.  (Va.)  344;   Bradley  v. 
Levy,  1856,  5  Wis.  400. 

2  Stone  t;.  Nichols,  1880,  43  Mich.  16 ;  4  N.  W.  545 ;  Brown  ».  St. 
Paul,  etc.,  R.  Co.,  1886,  36  Minn.  236;  31  N.  W.  941 ;  Clark  ».  Fair- 
child,  1840,  22  Wend.  (N.  Y.)  576. 

3  Sullivan  v.  Boley,  1888,  24  Fla.  501 ;  5  So.  244 ;  Newman  v.  Mc- 
Gregor, 1832,  5  Ohio  349 ;   24  Am.  Dec.  293 ;   Wainwright  v.  Straw, 
1843,  15  Vt.  215 ;  40  Am.  Dec.  675 ;  Perry  v.  Smith,  1850,  22  Vt.  301 ; 
Butcher  v.   Carlile,  1855,  12   Gratt.   (Va.)  520.     But   see    Pierson  v. 
Spaulding,  1886,  61  Mich.  90 ;  27  N.  W.  865 ;  Bradley  v.  Levy,  1856, 
5  Wis.  400. 

4  Savannah,  etc.,  R.  Co.  v.  Atkinson,  1894,  94  Ga.  780 ;  21  S.  E.  1010, 
(bill  for  cancellation  of  conveyance  on  abandonment  of  work  by  rail- 
way) ;    McClelland   v.  McClelland,  1898,  176  111.  83,;    51  N.  E.  559, 
(bill  to  set  aside  a  deed  on  breach  of  agreement  to  support) ;   Clark  v. 
McCleery,  1901,  115  la.  3;  87  N.  W.  696,  (grantor  intervened  in  fore- 
closure proceedings  begun  by  grantee  on  breach  of  latter's  agreement 
to  exchange  land) ;    Shepardson  v.  Stevens,  1889,  77  Mich.  256 ;    43 
N.  W.  918,  (bill  to  set  aside  a  deed  on  breach  of  agreement  to  support)  ; 
Pironi  v.  Corrigan,  1890,  47  N.  J.  Eq.  135 ;  20  Atl.  218,  (bill  to  set  aside 
a  deed  on  breach  of  agreement  to  procure  a  separation  between  grantor 
and  her  husband) ;  Michel  ».  Halheimer,  1890,  56  Hun  416 ;   10  N.  Y. 
Supp.  489,    (counterclaim  for  a  reconveyance  because  of    grantee's 
breach  of  agreement  to  improve  property  to  joint  profit) ;   Wilfong  v . 
Johnson,  1895,  41  W.  Wa.  283 ;  23  S.  E.  730,  (bill  to  set  aside  deed  on 
grantee's  failure  to  bind  himself  and  the  land  by  a  contract  in  writing 
to  support  grantor's  and  grantee's  father,  as  he  had  orally  agreed  to  do) ; 
Glocke  v.  Glocke,  1902,  113  Wis.  303 ;  89  N.  W.  118 ;  57  L.  R.  A.  458, 
(action  to  enforce  rescission  of  contract  for  breach  of  condition  sub- 
sequent;   agreement  was  for  support,  secured  by  mortgage,  equity 

416 


Chap.  XIX]  REPUDIATION   AND   BREACH  [§  263 

§  263.  (2)  Application  to  cases  of  repudiation  and  to  cases  of 
substantial  breach.  —  It  appears  to  be  settled,  both  in  England 
and  America,  that  the  repudiation  of  a  contract,  though  un- 
accompanied by  actual  breach,  justifies  a  demand  for  restitu- 
tion: 

Hochster  v.  De  la  Tour,  1853,  2  Ell.  &  Bl.  678 :  CROMPTON,  J. 
(p.  685) :  "  When  a  party  announces  his  intention  not  to 
fulfil  the  contract,  the  other  side  may  take  him  at  his  word  and 
rescind  the  contract." 

Ballon  v.  Billings,  1884,  136  Mass.  307 :  HOLMES,  J.  (p.  308) : 
"Such  a  repudiation  did  more  than  excuse  the  plaintiff  from 
completing  a  tender;  it  authorized  him  to  treat  the  contract 
as  rescinded  and  at  an  end.  It  had  this  effect,  even  if,  for  want 
of  a  tender,  the  time  for  performance  on  the  defendant's  part 
had  not  come,  and  therefore  it  did  not  amount  to  a  breach  of 
covenant.  ...  It  is  clear  that,  apart  from  technical  consider- 
ations, so  far  as  the  right  to  rescind  goes,  notice  that  a  party 
will  not  perform  his  contract  has  the  same  effect  as  a  breach." 

Drake  v.  Goree,  1853,  22  Ala.  409 :  GOLDTHWAITE,  J.  (p.  415) : 
"if,  while  the  contract  was  executory,  the  defendants  in  error 
did  any  act  which  showed  clearly  they  did  not  intend  to  per- 
form their  portion  of  the  contract,  it  would  have  justified  the 

other  party  in  terminating  it." 
v 

By  repudiation  is  meant  a  refusal  to  perform,1  or  an 
act  rendering  performance  impossible,2  though  an  admis- 

reading  into  the  conveyance  a  condition  subsequent  and  treating  the 
action  as  one  to  quiet  title). 

1  Johnstone  v.  Milling,  1886,  16  Q.  B.  D.  460 ;  Dingley  v.  Oler,  1886, 
117  U.  S.  490;   6  S.  Ct.  850;   Johnson  Forge  Co.  v.  Leonard,  1902,  3 
Penn.    (Del.)   342;   51  Atl.  305;   57  L.  R.  A.  225;   94  Am.  St.  Rep. 
86;   Harber  Bros.   Co.   ».   Moffat  Cycle  Co.,   1894,    151   HI.  84;   37 
N.   E.   676;  O'Neill  v.   Supreme  Council,  1904,  70  N.  J.  L.  410;   57 
Atl.  463;   Peters  Grocery  Co.  v.  Collins  Bag  Co.,  1906,  142  N.  C.  174; 
55  S.  E.  90;  Maffet  v.  Oregon,  etc.,  R.  Co.,  1905,  46  Or.  443;  80  Pac. 
489.     For  a  collection  of  authorities  see  South  Texas  Telephone  Co. 
v.  Huntington,  1909,      Tex.  Civ.  App.      ;   121  S.  W.  242,  247-9.     And 
see  Harriman,  "Contracts,"  §  521. 

2  Short  v.  Stone,  1846,  8  Q.  B.  358,  (contract  to  marry ;  defendant 
married  another) ;   Seibel  v.  Purchase,  1904,  134  Fed.  484,  (C.  C.  D. 
N.  J.),  (contract  to  convey  free  from  incumbrance ;  renewal  of  mortgage 

417 


§  263]  RESTITUTION   AS   ALTERNATIVE    REMEDY        [Part  IV 

sion  of  "  entire  inability  to  perform "  has  been  held  suffi- 
cient.1 

In  England  it  is  the  law,  apparently,  that  nothing  short  of 
repudiation  will  serve : 

Ehrensperger  v.  Anderson,  1848, 3  Exch.  148 :  Action  for  money 
had  and  received.  Held,  that  the  failure  of  the  defendant  to 
remit  a  bill  of  exchange  did  not  justify  rescission  of  the  contract 
and  an  action  for  restitution.  PARKE,  B.  (p.  158) :  "In  order 
to  constitute  a  title  to  recover  for  money  had  and  received,  the 
contract  on  the  one  side  must  not  only  not  be  performed  or 
neglected  to  be  performed,  but  there  must  have  been  something 
equivalent  to  saying  '  I  rescind  this  contract,'  —  a  total  refusal 
to  perform  it,  or  something  equivalent  to  that  which  would 
enable  the  plaintiff  on  his  side  to  say, '  If  you  rescind  the  contract 
on  your  part,  I  will  rescind  it  on  mine.'"  2 

There  are  not  a  few  expressions  to  the  same  effect  —  for  the 
most  part  dicta  —  in  American  cases : 

Graves  v.  White,  1882,  87  N.  Y.  463 :  FINCH,  J.  (p.  465)  : 
"The  doctrine  of  these  authorities  is,  that  the  refusal  of  one 
party  to  perform  his  contract  amounts  on  his  part  to  an  abandon- 
ment of  it.  The  other  party  thereupon  has  a  choice  of  remedies. 
He  may  stand  upon  his  contract,  refusing  assent  to  his  ad- 
versary's attempt  to  rescind  it,  and  sue  for  a  breach,  or  in  a 
proper  case,  for  a  specific  performance,  or  he  may  assent  to  its 
abandonment,  and  so  effect  a  dissolution  of  the  contract  by 
the  mutual  and  concurring  assent  of  both  parties.  .  .  .  While, 
therefore,  a  mere  neglect  to  perform  might  sometimes  amount 

by  vendor) ;  Woodberry  v.  Warner,  1890,  53  Ark.  488 ;  14  S.  W.  671, 
(contract  to  transfer  interest  in  boat ;  sale  of  same  by  defendant) ; 
Smith  v.  Treat,  1908,  234  111.  552 ;  85  N.  E.  289,  (contract  to  convey ; 
sale  to  stranger) ;  James  v.  Burchell,  1880,  82  N.  Y.  108,  (conveyance 
to  another) ;  Kicks  v.  State  Bank,  1904,  12  N.  D.  576 ;  98  N.  W.  408, 
(contract  to  convey ;  sale  to  another) ;  Krebs  Hop  Co.  v.  Livesley, 
1907,  51  Or.  527 ;  92  Pac.  1084,  (contract  for  sale  of  hops  to  be  grown ; 
sale  of  land  to  another).  And  see  Harriman,  "Contracts,"  §  521. 

1  Chamber  of  Commerce  v.   Sollitt,   1866,  43  111.  519.     See  also 
Tague  v.  McColm,  1909,  145  la.  179 ;  123  N.  W.  960. 

2  See   also    Freeth  v.  Burr,  1874,  L.  R.   9  C.  P.  208,  214 ;    In  re 
Phosnix,  etc.,  Co.,  1876,  4  Ch.  Div.  108 ;  Mersey  Steel  &  Iron  Co.  v. 
Naylor,  1884,  9  App.  Cas.  434,  438 ;   Cornwall  v.  Heuson,  [1900]  2  Ch. 
298 ;  Rhymney  R.  Co.  v.  Brecon,  etc.,  R.  Co.,  1900,  83  L.  T.  Rep.  111. 

418 


Chap.  XIX]  REPUDIATION   AND   BREACH  [§  263 

to  a  breach,  and  fall  short  of  an  election  to  abandon,  which 
the  assent  of  the  other  party  might  make  effective,  a  positive 
and  absolute  refusal,  a  deliberate  repudiation  of  the  stipula- 
tions of  the  contract,  gives  to  the  other  party  as  an  alterna- 
tive remedy  the  right  to  assent  to  such  abandonment  and  treat 
the  contract  as  dissolved."  l 

This  limitation,  as  the  foregoing  quotations  show,  rests  upon 
two  notions :  first,  that  rescission  is  a  matter  of  mutual  con- 
sent; second,  that  unless  the  party  in  default  actually  aban- 
dons the  contract,  his  consent  to  a  rescission  cannot  be  implied. 
It  is  submitted  that  the  first  is  false,  in  that  rescission,  as  the 
term  is  here  used,  is  not  a  matter  of  mutual  consent,  any  more 
than  is  the  avoidance  of  a  contract  for  fraud,  but  is  the  act  of 
one  party  in  the  exercise  of  a  right  conferred  upon  him  by 
law.  The  underlying  theory  is  that  if  one  fails  in  a  serious 
degree  to  perform  his  engagement,  the  other  party  may  disre- 
gard the  contract  and  demand  restitution  (see  ante,  §  260) .  It  is 
true  that  repudiation  may  evince  an  immoral  purpose  not  in- 
dicated by  an  unavoidable  or  even  a  negligent  breach,  however 
substantial ;  but  in  its  consequences  to  the  other  party  an  un- 
avoidable breach  may  be  quite  as  serious  as  a  willful  abandon- 
ment. The  second  is  likewise  false,  because  even  in  the  case 
of  abandonment  or  repudiation  it  is  not  a  fair  inference  that 
the  party  in  default  consents  to  abrogate  the  contract  and  make 
restitution  to  the  other  party.  There  may  be  an  express  agree- 
ment of  rescission,  either  in  the  case  of  repudiation  or  in  the  case 
of  breach,  but  to  say  that  an  agreement  to  rescind  is  implied 
is  to  resort  to  a  fiction  —  and  one  which  would  serve  in  the  case 
of  substantial  breach  quite  as  well  as  in  that  of  repudiation.2 

1  See  also  Monarch  Cycle  Co.  v.  Royer  Wheel  Co.,  1900,  105  Fed. 
324 ;  44  C.  C.  A.  523  ;  McAllister-Coman  Co.  v.  Matthews,  1910,  167  Ala. 
361 ;  52  So.  416 ;   140  Am.  St.  Rep.  43 ;  Quarton  v.  Amer.  Law  Book 
Co.,  1909,  143  la.  517 ;  121  N.  W.  1009 ;  32  L.  R.  A.  (N.  S.)  1 ;  Wright 
v.  Haskell,  1858,  45  Me.  489 ;  West  v.  Bechtel,  1900,  125  Mich.  144 ; 
84  N.  W.  69 ;   51  L.  R.  A.  791 ;    Blackburn  ».  Reilly,  1885,  47  N.  J. 
L.  290 ;    54  Am.  Rep.  159.      Professor  Keener  accepted    the   limita- 
tion without  question.     "Quasi-Contracts,"  pp.  303,  304. 

2  See  Bannister  v.  Reed,  1844,  1  Oilman  (6  111.)  92. 

419 


§  264]  RESTITUTION   AS   ALTERNATIVE   REMEDY         [Part  IV 

There  is  no  sound  reason,  then,  for  allowing  the  remedy  of 
restitution  in  one  case  and  denying  it  in  the  other.  As  a  matter 
of  fact,  restitution  is  generally  enforced  in  America  where  there 
has  been  such  a  substantial  breach  as  would  constitute  a  defense 
to  an  action  by  the  party  in  default  to  enforce  the  contract : 

Porter  v.  Arrowhead  Co.,  1893,  100  Cal.  500;  35  Pac.  146: 
GAROUTTE,  J.  (p.  504) :  "  A  failure  to  pay  an  installment  of  the 
contract  price,  as  provided  in  the  contract,  is  a  substantial 
breach  of  the  contract,  and  gives  the  contractor  the  right  to 
consider  the  contract  at  an  end,  cease  work,  and  recover  the 
value  of  the  work  already  performed."  * 

§  264.  (3)  Application  to  cases  of  contracts  under  seal.  — 
There  is  some  authority  for  the  proposition  that  in  the  case  of 
the  renunciation  or  breach  of  a  contract  under  seal  the  injured 
party  may  not  elect  to  sue  in  assumpsit  for  restitution,  but  is 
confined  to  his  remedy  in  debt  or  covenant.2  Two  reasons  may 
be  offered  for  this  view :  (1)  the  doctrine  that  one  must  pursue 
his  highest  remedy,  and  (2)  the  doctrine  that  a  contract  under 
seal  can  be  dissolved  only  by  an  act  of  like  dignity.  The  first 
doctrine,  it  is  submitted,  is  not  properly  applicable  to  this  case 
if  the  contract  is  regarded  as  dissolved  by  the  "  rescission."  For 
if  there  is  no  longer  a  promise,  the  only  remedy  of  the  plaintiff 
is  an  action  for  restitution.3  But  if  the  right  to  restitution  is 

1  Also :  United  States  v.  Molloy,  1904,  127  Fed.  953 ;   62  C.  C.  A. 
585 ;  Carter  v.  Fox,  1909,  11  Cal.  App.  67 ;    103  Pac.  910;    Carney  v. 
Newberry,  1860,  24  111.  203;  Wolf  v.  Schlacks,  1896,  67  111.  App.  117; 
Anderson  v.  Haskell,  1876,  45  la.  45 ;   N.  Y.  Brokerage  Co.  v.  Whar- 
ton,  1909,  143  la.  61;     119  N.  W.  969;     Festing  v.  Hunt,   1890,  6 
Manitoba  381 ;  Brown  v.  Woodbury,  1903,  183  Mass.  279 ;   67  N.  E. 
327;   Stahelin  v.  Sowle,  1891,  87  Mich.  124;  49  N.  W.  529;  Peet  ». 
City  of  East  Grand  Forks,  1907,  101  Minn.  518;  112  N.  W.  1003; 
Mugan  v.  Regan  &  Co.,  1892,  48  Mo.  App.  461 ;    Welsh  v.  Gossler, 
1882,  89  N.  Y.  540;    Preble  ».  Bottom,  1855,  27  Vt.  249.    For  addi- 
tional cases,  see  Wald's   Pollock,  "  Contracts  "  (Williston's  ed.),  p. 
342,  n. 

2  Western  v.  Sharp,  1853,  14  B.  Mon.  (53  Ky.)  144;   McManus  v. 
Cassidy,  1870,  66  Pa.  St.  260.     But  see  Amer.  Life  Ins.  Co.  v.  McAden, 
1885,  109  Pa.  St.  399 ;   1  Atl.  256. 

3  Keener,  "  Quasi-Contracts,"  pp.  308,  309. 

420 


Chap.  XIX]      APPLICATION  TO  CONTRACTS  UNDER  SEAL       [§  264 

merely  an  alternative  remedial  right  under  the  contract,  as 
suggested  at  the  beginning  of  this  chapter,  the  doctrine  would 
seem  to  present  a  real  obstacle  to  the  use  of  the  remedy  in  the 
case  of  a  contract  under  seal.  The  second  doctrine,  though 
thoroughly  established  in  the  early  common  law,  is  in  this 
country  disappearing.  In  many  jurisdictions  the  seal  has  been 
entirely  divested  of  its  legal  attributes;  in  others,  while  still 
recognized  by  the  law,  it  has  so  suffered  in  prestige  that  a 
sealed  contract  may  be  varied  or  discharged  by  parol  agree- 
ment.1 It  is  "  going  very  little  further  "  to  hold  that  a  sealed 
contract  may  be  rescinded  for  repudiation  or  substantial 
breach : 

Weaver  v.  Bentley,  1803,  1  Caines  (N.  Y.)  47:  KENT,  J. 
(p.  48) :  "It  is  not  stated  for  what  the  notes,  money  or  stock 
were  given;  presuming  them  to  have  been  the  consideration 
of  the  covenant,  the  question  then  will  be,  whether  the  de- 
fendant having  failed  to  perform  on  his  part,  the  plaintiff  may 
disaffirm  the  contract  and  resort  to  his  assumpsit  to  recover 
back  what  he  had  paid.  We  are  of  the  opinion  that  he  had  his 
election  either  to  proceed  on  the  covenant,  and  recover  damages 
for  the  breach,  or  to  disaffirm  the  contract,  and  bring  assumpsit 
to  recover  back  what  he  had  paid  on  a  consideration  which  had 
failed. 

Ballon  v.  Billings,  1884,  136  Mass.  307 :  HOLMES,  J.,  after 
referring  to  the  Massachusetts  cases  holding  that  a  sealed 
contract  might  be  discharged  by  parol  agreement  (p.  309) ; 
"Whether  these  cases  would  have  been  decided  the  same  way 
in  earlier  times  or  not,  we  have  no  disposition  to  question  them 
upon  this  point,  and  it  is  going  very  little  further  to  hold  that 
such  a  contract  may  be  rescinded  if  it  is  repudiated  by  the  other 
side."  2 

Professor  Keener  says  that  the  cases  indicate  that  while  money 
paid  in  performance  of  a  contract  under  seal  may  be  recovered 

1Wald's  Pollock,  "Contracts"  (Williston's  ed.),  pp.  826,  827,  and 
cases  cited. 

2  Also:  Webster  v.  Enfield,  1848,  5  Oilman  (10  111.)  298;  Amer. 
Life  Ins.  Co.  v.  McAden,  1885,  109  Pa.  St.  399 ;  1  Atl.  256.  And  see 
Siebert  v.  Leonard,  1871,  17  Minn.  433. 

421 


§  265]  RESTITUTION   AS   ALTERNATIVE   REMEDY         [Part  IV 

in  a  count  for  money  had  and  received,  the  sole  remedy  of  one 
who  has  delivered  property  or  rendered  services  under  such  a 
contract  is  an  action  on  the  covenant.1  Professor  Williston, 
however,  has  pointed  out  that  while  this  distinction  may  be 
suggested  by  the  English  cases,  it  finds  no- support  in  America.2 
In  Weaver  v.  Bentley,3  where  the  plaintiff  had  given  notes,  money, 
and  farm  stock,  a  recovery  appears  to  have  been  allowed  for 
the  property  as  well  as  for  the  money,  and  in  none  of  the  other 
cases,  whether  allowing  a  recovery  or  not,  does  the  court  evince 
a  consciousness  of  the  distinction. 

§  265.  (Ill)  Restitution  by  plaintiff  as  condition  precedent.  — 
The  right  to  restitution  is  said  to  be  subject  to  the  condition  that 
the  party  seeking  to  exercise  it  shall  first  restore  or  offer  to  restore 
anything  that  he  may  have  received  under  the  contract.4 

1  Keener,  "Quasi-Contracts,"  p.  308. 

2  Wald's  Pollock,  "Contracts"  (Williston's  ed.),  p.  344,  n. 
3 1803,  1  Caines  (N.  Y.)  47. 

4  Miner  v.  Bradley,  1839,  22  Pick.  (Mass.)  457.  Action  to  recover 
money  paid  for  a  quantity  of  hay.  Plaintiff  bought  of  defendant 
a  cow  and  400  pounds  of  hay  for  $17,  which  was  paid  at  the  time. 
The  cow  was  delivered,  but  the  defendant  refused  to  deliver  the  hay. 
MORTON,  J. :  "When  the  defendant  refused  to  deliver  the  hay,  it  was 
such  a  violation  of  the  contract  on  his  part,  as  would  have  justified 
the  plaintiff  in  rescinding  it.  And,  had  he  done  so,  he  would  have  been 
entitled  to  a  return  of  the  money  which  he  had  paid.  This,  however, 
he  could  only  do  by  restoring  the  defendant  to  the  situation  he  was  in 
before  the  contract,  viz.  by  returning  the  cow.  But  if  he  chose  to 
retain  her,  his  only  remedy  would  be  upon  the  special  contract  for 
damages  for  the  convertion  of  the  hay."  See  also  Kauffman  v. 
Raeder,  1901,  108  Fed.  171 ;  47  C.  C.  A.  278 ;  54  L.  R.  A.  247,  (sale  of 
stock);  Los  Angeles  Traction  Co.  v.  Wilshire,  1902,  135  Cal.  654; 
67  Pac.  1086;  Mizell  v.  Watson,  1909,  57  Fla.  Ill ;  49  So.  149,  (horse 
and  buggy) ;  Summerall  v.  Graham,  1879,  62  Ga.  729,  (possession  of 
land) ;  County  of  Jackson  v.  Hall,  1870,  53  111.  440,  (repudiated  bonds) ; 
Modern  Woodmen  v.  Vincent,  1907,  40  Ind.  App.  711 ;  82  N.  E.  475, 
(insurance  premiums) ;  Moore  v.  Bare,  1860,  11  la.  198,  (patent  right) ; 
Clover  v.  Gottlieb,  1898,  50  La.  Ann.  568 ;  23  So.  459,  (horses  given 
as  part  payment  for  land) ;  Poche"  v.  New  Orleans  Co.,  1900,  52  La.  Ann. 
1287 ;  27  So.  797,  (purchase  price) ;  Clark  v.  Baker,  1843,  5  Mete. 
(Mass.)  452,  (part  of  cargo  of  corn) ;  Snow  v.  Alley,  1887,  144  Mass. 
546;  11  N.  E.  764;  59  Am.  Rep.  119,  (money  loaned) ;  Gullich  v.  Al- 
ford,  1883,  61  Miss.  224,  (profits  of  partnership) ;  Doughten  v.  Camden 
Assn.,  1886,  41  N.  J.  Eq.  556 ;  7  Atl.  479,  (mortgage  and  assignment  of 

422 


Chap.  XIX]  RESTITUTION   BY   PLAINTIFF  [§  265 

Where,  however,  it  is  money  that  has  been  received,  the  rule 
is  frequently  not  enforced,  the  plaintiff  being  permitted  to  re- 
cover the  value  of  his  own  performance  less  the  amount  received 
by  him.1 

What  if  the  res  received  by  the  plaintiff  has  been  lost  or  dis- 
posed of,  or  if  it  is  something  of  a  nature  that  cannot  be  returned 
in  specie,  as  services,  or  the  protection  of  insurance,  or  the  use  of 
property?  By  the  weight  of  authority,  except  in  the  case  of 
insurance  contracts,  restitution  is  not,  under  such  circumstances, 
an  available  remedy : 

De  Montague  v.  Bacharach,  1902,  181  Mass.  256 ;  63  N.  E. 
435 :  Action  to  recover  money  paid  for  privilege  of  running  a 
restaurant  in  part  of  a  basement  of  which  the  defendants  were 
lessees.  LORING,  J.  (p.  260) :  "  The  second  ground  on  which 
the  plaintiff  seeks  to  keep  his  verdict  is  that  on  the  breach  of 
the  contract  by  the  defendants,  he  was  entitled  to  rescind  the 
contract  and  recover  from  the  defendants  what  he  paid  under 
it.  ...  In  the  case  at  bar,  the  plaintiff  had  enjoyed  the  privi- 
lege of  conducting  the  restaurant  for  at  least  ten  months; 
for  that  reason  he  could  not  put  the  defendants  in  statu  quo 
and  therefore  could  not  rescind  the  contract  on  the  defendants 
committing  a  breach  of  it."  2 

shares) ;  Gale  v.  Nixon,  1826,  6  Cow.  (N.  Y.)  445,  (possession  of  land) ; 
Brown  v.  Witter,  1840,  10  Ohio  142,  (possession  of  land) ;  Fay  v.  Oliver, 
1848,  20  Vt.  118;  49  Am.  Dec.  764,  (possession  of  land);  Phelps  v. 
Mineral  Spring  Heights  Co.,  1904,  123  Wis.  253 ;  101  N.  W.  364,  (land 
contract).  "The  offer  to  return  the  property  must  be  continuous  and 
kept  good."  —  J.  B.  Alfree  Mfg.  Co.  v.  Grape,  1900,  59  Neb.  777, 
782;  82  N.  W.  11,  13. 

1  Cook  v.  Gray,  1882,  133  Mass.  106 ;    Connolly  v.  Sullivan,  1899, 
173  Mass.  1 ;    53  N.  E.  143 ;   Siebert  v.  Leonard,  1871,  17  Minn.433  ; 
McCullough  v.  Baker,  1871,  47  Mo.  401;    Smith  v.  Keith  &  Perry 
Coal  Co.,  1889,  36  Mo.  App.  567 ;  Moore  v.  Board  of  Regents,   1908, 
215  Mo.  705  ;   115  S.  W.  6 ;   Clark  v.  Manchester,  1872,  51  N.  H.  594 ; 
Wellston  Coal  Co.  ».  Franklin  Paper  Co.,  1897,  57  Ohio  St.  182 ;    48 
N.  E.  888. 

2  Also :   Kauffman  v.  Raeder,  1901,  108  Fed.  171 ;   47  C.  C.  A.  278; 
54  L.  R.  A.  247;  Snow  v.  Alley,  1887,  144  Mass.  546;  11  N.  E.  764; 
59  Am.  Rep.  119,  (aid  to  corporation  in  which  plaintiff  was  interested) ; 
Gullich  v.  Alford,  1883,  61  Miss.  224,  (profits  of  partnership) ;   Fay  v. 
Oliver,  1848,  20  Vt.  118;    49  Am.  Dec.  764,  (use  of  land).     In  life 

423 


§  265]  RESTITUTION    AS   ALTERNATIVE   REMEDY         [Part  IV 

But  there  are  a  few  cases  to  the  contrary.  Thus,  in  the  Mas- 
sachusetts case  of  Brown  v.  Woodbury,1  decided  only  one  year 
later  than  De  Montague  v.  Bacharack,2  where  the  plaintiff, 
pursuant  to  the  terms  of  a  contract  of  employment,  had  received 
the  benefit  of  the  board  of  his  father  and  mother  for  several 
months,  the  court  said :  "  Part  payment  in  money  would  not  bar 
the  plaintiff  from  the  action  on  quantum  meruit,  and  in  principle 
part  payment  in  board  can  have  no  different  effect."  And  in 
the  Georgia  case  of  Timmerman  v.  Stanley,3  where  the  plaintiff 

insurance  cases,  by  the  apparent  weight  of  authority,  the  insured 
may  enforce  restitution  of  the  premiums  paid,  notwithstanding 
the  fact  that  he  has  enjoyed  the  protection  of  the  insurance  con- 
tract up  to  the  time  of  its  repudiation  or  breach  by  the  company,  and 
without  deducting  the  value  of  such  protection.  Black  v.  Supr. 
Council,  Amer.  Legion  of  Honor,  1903,  120  Fed.  580,  (C.  C.  Ind.) ;  off. 
123  Fed.  650 ;  59  C.  C.  A.  414 ;  Van  Werden  v.  Equitable  Life  Assur. 
Co.,  1896,  99  la.  62 ;  68  N.  W.  892 ;  American  Life  Ins.  Co.  v.  Mc- 
Aden,  1885,  109  Pa.  St.  399 ;  1  Atl.  256.  Contra :  Phoenix  Mut.  Life 
Ins.  Co.  v.  Baker,  1877,  85  111.  410 ;  Continental  Life  Ins.  Co.  v.  Hauser, 
1887,  111.  Ind.  266;  12  N.  E.  479.  The  position  of  the  courts  which 
allow  a  recovery  in  these  insurance  cases  may  be  explained,  in  part 
at  least,  by  the  fact  that  contracts  of  insurance  are  peculiar  in  that 
the  protection  enjoyed  by  the  assured  is  not  something  which  might 
have  been  sold  to  another  if  the  insured  had  not  bought  it,  and  further 
in  that  the  only  value  with  which  the  company  has  irrevocably  parted 
is  the  expense  of  issuing  the  policy  and  of  doing  the  necessary  book- 
keeping on  the  insured's  account.  See  Day  v.  Conn.  Gen.  Life  Ins. 
Co.,  1878,  45  Conn.  480 ;  29  Am.  Rep.  693,  in  which  it  was  said  that 
the  insured  might  recover  "the  equitable  and  just  value  of  the  policy." 

1 1903,  183  Mass.  279,  282  ;  67  N.  E.  327. 

'  1902,  181  Mass.  256;   63  N.  E.  435. 

3  1905,  123  Ga.  850,  854;  51  S.  E.  760;  1  L.  R.  A.  (N.  S.)  379. 
In  this  case  the  court  said:  "This  is  a  general  rule  where  one  party 
to  the  contract  has  received  goods,  money,  or  other  thing  of  value, 
which  is  capable  of  being  returned  to  the  other  party.  But  in  a  con- 
tract like  that  involved  in  the  present  case,  where  a  person  agrees  to 
teach  another  a  certain  thing,  to  qualify  him  for  a  certain  position,  if 
he  gives  the  student  some  instruction  and  then  refuses  to  complete 
his  contract,  there  would  be  no  possible  way  by  which  such  instruction 
as  he  had  given  could  be  returned  or  tendered  back  to  him ;  nor  is 
the  other  party  required  to  estimate  value  for  what  has  been  done 
and  tender  such  amount.  He  cannot  hold  on  to  the  amount  paid,  refuse 
to  proceed  with  the  contract,  and  defend  against  an  action  to  recover 
the  price  paid  on  the  ground  that  the  plaintiff  had  not  tendered  back 
to  him  his  instruction,  and  could  not  restore  him  to  the  status  quo." 

424 


Chap.  XIX]  RESTITUTION   BY   PLAINTIFF  [§  265 

had  purchased  two  scholarships  in  a  business  college  and  had 
been  wrongfully  expelled  before  completion  of  the  courses  to 
which  he  was  entitled,  it  was  held  that  a  recovery  was  not  barred 
by  the  fact  that  the  plaintiff,  by  reason  of  having  received  some 
instruction,  could  not  place  the  defendant  in  statu  quo.1 

In  England  this  rule  that  the  defendant  must  be  placed  in 
statu  quo  has  been  so  rigidly  applied  that  one  who  has  received 
the  benefit  of  part  performance  is  rarely  in  a  position  to  demand 
restitution.  Thus,  though  he  returns  property  received  by  him, 
he  will  not  be  permitted  to  enforce  restitution  because  he  has 
also  enjoyed  a  benefit  which  cannot  be  returned  in  specie  —  the 
temporary  use  of  the  property : 

Hunt  v.  Silk,  1804,  5  East  449 :  Action  to  recover  money 
paid  under  a  contract  for  a  lease.  The  plaintiff  took  immediate 
possession,  but  upon  the  defendant's  failure  to  make  repairs 
within  ten  days,  as  agreed,  quit  the  house.  Lord  ELLEN- 
BOROUGH,  CJ.  (p.  452) :  "Now  where  a  contract  is  to  be 
rescinded  at  all,  it  must  be  rescinded  in  toto  and  the  parties 
put  in  statu  quo.  But  here  was  an  intermediate  occupation, 
a  part  execution  of  the  agreement,  which  was  incapable  of  being 
rescinded.  If  the  plaintiff  might  occupy  the  premises  two  days 
beyond  the  time  when  the  repairs  were  to  have  been  done  and 
the  lease  executed,  and  yet  rescind  the  contract,  why  might 
he  not  rescind  it  after  a  twelvemonth  on  the  same  account  ? 
This  objection  cannot  be  gotten  rid  of :  the  parties  cannot  be 
put  in  statu  quo."  2 

The  American  courts,  in  general,  have  assumed  a  more  liberal 
attitude,  and  not  infrequently  have  ignored  the  incidental  bene- 
fit derived  by  the  plaintiff  from  the  temporary  use  or  possession 
of  property  received  under  the  contract : 

Campbell  Mfg.  Co.  v.  Marsh,  1894, 20  Colo.  22 ;  36  Pac.  799 :  Ac- 
tion to  recover  money  paid  under  a  contract  for  the  purchase  of  a 

1  See  also  Ottoway  v.  Milroy,  1909,  144  la.  631 ;   123  N.  W.  467, 
(services  of  child  in  return  for  clothing,  education,  etc. ;  defendant 
was  allowed  credit  for  value  of  benefit  actually  conferred). 

2  Also:    Street  v.  Blay,  1831,  2  Barn.  &  Ad.  456;    Blackburn  v. 
Smith,  1848,  2  Ex.  783 ;  Beed  v.  Blandford,  1828,  2  Younge  &  J.  278. 

425 


§  265]  RESTITUTION   AS   ALTERNATIVE    REMEDY         [Part  IV 

printing  press  and  a  folding  machine  from  the  defendant.  The 
press  was  delivered  to  the  plaintiff  and  used  for  a  period  of 
about  seven  weeks,  when  the  contract  was  rescinded  for  the  non- 
delivery of  the  folder.  HAYT,  C.J.  (p.  31) :  "It  is  urged  that 
as  the  press  had  been  put  in  use  by  the  appellees  the  appel- 
lant could  not  be  placed  in  statu  quo  and  hence  the  former 
could  not  rescind.  It  is  undoubtedly  true  that  where  one  of 
the  parties  to  a  contract  seeks  to  rescind,  he  must  place  the 
other  in  statu  quo.  He  will  not  be  allowed  to  repudiate  a  con- 
tract and  retain  a  benefit  derived  therefrom.  In  this  case, 
however,  it  was  in  contemplation  of  the  parties  that  the  press 
should  be  used  pending  the  delivery  of  the  folder.  The  evi- 
dence shows  that,  in  fact,  it  was  used  only  to  a  very  limited 
extent;  that  appellees  had  little  or  no  benefit  from  such  use, 
and  that  the  press  was  returned  in  as  good  condition  as  when 
received.  It  is  true  that  the  witness  testified  that  it  would  not 
sell  so  well  as  an  unused  press,  but  the  rule  requiring  the  seller 
to  be  placed  in  statu  quo  has  never,  we  think,  been  extended  so 
far  as  to  entitle  the  party  in  default  to  be  saved  from  all  loss."  1 

1  See  also  Nothe  v.  Nomer,  1887,  54  Conn.  326 ;  8  Atl.  134,  (plf . 
had  been  in  possession  of  real  property  for  three  months) ;  Benson  v. 
Cowell,  1879,  52  la.  137 ;  2  N.  W.  1035,  (plf.  had  had  use  of  $570  for 
five  months);  Reynolds  v.  Lynch,  1906,  98  Minn.  58;  107  N.  W. 
145,  (value  of  option  for  90  days).  This  liberality  was  carried  very 
far  in  Ankeny  v.  Clark,  1893,  148  U.  S.  345 ;  13  S.  Ct.  617,  where 
the  plaintiff  was  allowed  to  rescind  a  contract  and  recover  the  value 
of  wheat  delivered  thereunder,  although  he  had  enjoyed  the  posses- 
sion of  land  which  the  defendant  had  contracted  to  convey  to  him  for 
over  four  years,  which  possession  was  admitted  to  be  worth  more  than 
$2000.  See  also  Wright  v.  Haskell,  1858,  45  Me.  489.  Cf.  Aultman 
&  Taylor  Co.  v.  Mead,  1901,  109  Ky.  583 ;  60  S.  W.  294,  where  it 
was  held  that  one  who  has  used  a  sawmill  for  3  years  cannot  rescind, 
since  such  use  "would  very  probably  reduce  its  salable  value." 

There  are  a  number  of  cases  which,  while  holding  that  rescission 
cannot  be  made  without  a  return  of  property  received  by  the  plaintiff, 
apparently  assume  that  upon  such  restitution  by  the  plaintiff  he  may 
rescind.  In  these  cases  nothing  is  said  of  the  impossibility  of  placing 
the  parties  in  statu  quo  because  of  the  plaintiff's  use  or  possession  of 
the  property.  See  Summerall  v.  Graham,  1879,  62  Ga.  729;  Moore 
v.  Bare,  1860,  11  la.  198;  Clover  v.  Gottlieb,  1898,  50  La.  Ann.  568; 
23  So.  459;  Miner  v.  Bradley,  1839,  22  Pick.  (Mass.)  457;  Clark  v. 
Baker,  1843,  5  Mete.  (Mass.)  452 ;  Boeker  v.  Crescent  Belting,  etc., 
Co.,  1903,  101  Mo.  App.  429 ;  74  S.  W.  385 ;  Gale  v.  Nixon,  1826,  6 
Cow.  (N.  Y.)  445 ;  Brown  v.  Witter,  1840,  10  Ohio  142. 

426 


Chap.  XIX]  WHAT   CONSTITUTES   AN   ELECTION  [§  266 

The  many  American  cases  allowing  rescission  for  breach  of 
warranty  exemplify  this  attitude,1  while  those  denying  the  right 
of  rescission  for  breach  of  warranty  rest  in  the  main,  not  upon 
the  ground  that  the  parties  cannot  be  restored  to  their  original 
positions  because  of  the  plaintiff's  temporary  enjoyment  of  the 
property,  but  upon  the  ground  that  a  warranty  is  a  collateral 
contract. 

In  a  few  instances  the  courts  have  declared  that  where  the 
plaintiff  has  enjoyed  the  use  of  property,  he  should  recover, 
upon  its  restoration,  the  value  of  the  benefit  conferred  upon  the 
defendant  less  the  value  of  the  use  of  the  property.2  This  is 
a  just  and  reasonable  solution  of  the  problem.  Indeed,  even 
where  no  part  of  that  which  the  plaintiff  has  received  can  be 
restored  in  specie  —  as  in  the  case  of  goods  which  have  been 
disposed  of,  or  of  services  rendered  the  plaintiff  —  it  would  seem 
reasonable  to  permit  Jiim  to  recover  the  value  of  the  benefit  con- 
ferred upon  the  defendant  subject  to  a  deduction  for  what  has 
been  received  from  the  defendant.  It  has  been  suggested  that 
it  is  impossible,  under  such  circumstances,  to  "  apportion  the 
consideration  "  —  by  which,  apparently,  is  meant  that  it  is 
impossible  to  determine  the  difference  in  value  between  the 
performance  of  the  defendant  and  that  of  the  plaintiff;  but, 
as  Professor  Keener  has  shown,  the  problem  would  be  no  more 
difficult  than  that  which  confronts  a  jury  in  many  cases  of  breach 
of  contract.3 

§  266.  (IV)  What  constitutes  an  election.  —  As  in  other  cases 
of  alternative  remedies,  there  is  some  difficulty  in  determining 
what  constitutes  such  an  election  of  one  remedy  as  precludes  a 


1  Williston,  "Sales,"  §§  608,  610,  and  cases  there  cited. 

2  Wilson  v.  Burks,  1883,  71  Ga.  862 ;   Todd  v.  Leach,  1897,  100  Ga. 
227  ;  28  S.  E.  43  ;  Todd  v.  McLaughlin,  1900,  125  Mich.  268 ;  84  N.  W.1 
146 ;  Brewster  v.  Wooster,  1892,  131  N.  Y.  473  ;  30  N.  E.  489  ;  Weitzei 
v.  Leyson,  1909,  23  S.  D.  367  ;   121  N.  W.  868 ;  Mason  v.  Lawing,  1882, 
10  Lea  (78  Tenn.)  264.     In  Kicks  v.  State  Bank,  1904,  12  N.  D.  576 ; 
98  N.  W.  408,  where  the  purchaser  of  land  rescinded  because  of  the 
vendor's  breach,  it  was  held  that  the  value  of  the  purchaser's  posses- 
sion was  offset  by  the  interest  on  the  money  paid  to  the  vendor. 

3  Keener,  "Quasi-Contracts,"  p.  306. 

427 


§  267]  RESTITUTION   AS   ALTERNATIVE   REMEDY         [Part  IV 

resort  to  the  other.1  The  prosecution  of  one  remedy  to  judg- 
ment must  be  conclusive,  since  all  rights  of  the  injured  party 
are  merged  in  the  judgment.2  The  commencement  of  an  action 
to  enforce  one  remedy,  by  the  weight  of  authority,  is  decisive.3 
Ordinarily  inaction  has  no  significance,  but  the  retention,  for 
an  unreasonable  time,  of  money  or  property  received  under  the 
contract,4  or  the  failure,  in  the  case  of  a  contract  requiring  more 
than  one  act  by  the  other  party,  to  give  reasonable  notice  that 
further  performance  will  not  be  accepted,5  may  properly  be 
regarded  as  evincing  an  election  not  to  seek  restitution. 

§  267.  (V)  The  necessity  of  notice  or  demand :  Statute  of 
limitations.  —  It  is  frequently  stated  that  reasonably  prompt 
notice  of  rescission  is  a  prerequisite  to  the  action  for  restitution, 
or  that  the  election  of  restitution  must  be  manifested  without 
undue  delay.6  An  examination  of  the  cases,  however,  will  show 

1  See  post,  §  298 ;  also  15  Cyc.  259  et  seq. 

2  Goodman  v.  Pocock,  1850,  15  Q.  B.  576 ;    Graham  v.  Halloway, 
1867,  44   111.  385.     And   see    Bacon  v.  Moody,  1903,  117  Ga.  207; 
43  S.  E.  482 ;  Weill  v.  Fontanel,  1889,  31  IU.  App.  615 ;  also  cases  cited 
in  15  Cyc.  259. 

3  Brown  v.  St.  Paul,  etc.,  R.  Co.,  1886,  36  Minn.  236 ;  31  N.  W.  941 ; 
Lawrence  v.  Taylor,  1843,  5  Hill  (N.  Y.)   107,  114,  115;    Graves  v. 
White,  1882,  87  N.  Y.  463.     And  see    Theusen  v.  Bryan,  1901,  113 
la.  496;  85  N.  W.  802 ;    Holman  v.  Updike,  1911,  208  Mass.  466,  94 
N.  E.  689;  Moller  v.  Tuska,  1881,  87  N.  Y.  166;    Conrow  v.  Little, 
1889,  115  N.  Y.  387;   22  N.  E.  346;   5  L.  R.  A.  693;  also  cases  cited 
in  15  Cyc.  259,  260. 

4  Reynolds  v.  Nelson,  1821,  6  Mad.  18;    Mizell  v.  Watson,  1909, 
57  Fla.  Ill ;  49  So.  149 ;  Harden  v.  Lang,  1900,  110  Ga.  392 ;  36  S.  E. 
100;    Sanford  v.  Emory's  Admr.,  1864,  34  IU.  468;    Axtel  v.  Chase, 
1881,  77  Ind.  74;   J.  B.  Alfree  Mfg.  Co.  v.  Grape,  1900,  59  Neb.  777; 
82  N.  W.  11.     And  see  Graham  v.  Hatch  Storage  Battery  Co.,  1904, 
186  Mass.  226 ;  71  N.  E.  532,  where  it  was  held  that  the  use  of  goods 
after  notice  of  rescission  is  an  "abandonment  of  the  right  of  rejection." 

5  Mills  v.  City  of  Osawatomie,  1898,  59  Kan.  463 ;    53  Pac.  470 ; 
Lawrence  v.  Dale,  1817,  3  Johns.  Ch.  (N.  Y.)  23. 

8  See  Hennessy  v.  Bacon,  1890,  137  U.  S.  78 ;  11  S.  Ct.  17;  Mizell 
v.  Watson,  1909,  57  Fla.  Ill ;  49  So.  149 ;  Carney  v.  Newberry,  I860, 
24  111.  203  ;  Axtel  v.  Chase,  1881,  77  Ind.  74 ;  Mullin  v.  Bloomer,  1860, 
11  la.  360 ;  Olson  v.  Brison,  1906,  129  la.  604 ;  106  N.  W.  14 ;  Mills  v. 
City  of  Osawatomie,  1898,  59  Kan.  463 ;  53  Pac.  470 ;  Gaty  v.  Sack, 
1885,  19  Mo.  App.  470 ;  World  Pub.  Co.  v.  Hull,  1899,  81  Mo.  App. 
277 ;  J.  B.  Alfree  Mfg.  Co.  v.  Grape,  1900,  59  Neb.  777 ;  82  N.  W.  11 ; 
Swazey  v.  Choate  Mfg.  Co.,  1868,  48  N.  H.  200. 

428 


Chap.  XIX]  NECESSITY  OF   NOTICE   OR   DEMAND  [§  267 

that  in  most  of  them,  either  the  plaintiff  had  received  something 
from  the  defendant  under  the  contract,  or  the  contract  was  of 
such  a  nature  that  unless  promptly  informed  the  defendant 
would  naturally  proceed  with  his  performance.  Under  such 
circumstances,  as  is  pointed  out  in  the  preceding  section,  in- 
action may  well  be  interpreted  as  an  election  not  to  seek  res- 
titution. Hence  the  statement  that  unless  notice  is  promptly 
given  restitution  will  not  be  enforced.1  Upon  the  theory  that 
restitution  and  compensation  are  alternative  remedial  rights 
arising  upon  the  repudiation  or  material  breach  of  a  contract, 
there  is  no  reason  for  making  notice,  as  such,  a  prerequisite  to 
the  election  of  either.2 

In  Texas  the  peculiar  doctrine  is  announced,  in  cases  of  the 
sale  of  real  property,  that  no  notice  is  necessary  where  the  vendee 
has  abandoned  the  contract  or  has  so  acted  as  to  give  the  vendor 
the  reasonable  belief  that  he  has  abandoned  it,  or  where  the 
vendee  has  not  commenced  performance ;  but  that  where  the 
vendee  has  partly  performed  his  engagement,  as  by  "paying  a 
portion  of  the  purchase  money,  or  taking  possession  and  making 
improvements,"  and  then  has  committed  a  material  breach,  he 
is  entitled  to  reasonable  notice  of  the  vendor's  intention  to 
rescind.  "  The  reason  of  this  rule,"  it  is  said,  "  is  obvious.  He 

1  Notice  of  election  of  restitution  should  not  be  confused  with  the 
notice  that  is  sometimes  necessary  in  order  to  make  a  default  sub- 
stantial.    Where  time  is  not  of  the  essence  of  the  contract,  as  in  the 
case  of  the  sale  of  land,  or  where  no  time  is  fixed  by  the  contract,  the 
injured  party  cannot  establish  such  a  breach  as  will  justify  an  action 
for  restitution  unless,  by  notice,  he  fixes  a  reasonable  time  within  which 
the  other  party  is  required  to  perform.     Green  v.  Sevin,  1879,  13  Ch. 
Div.  589;   McFadden  v.  Henderson,  1901,  128  Ala.  221;   29  So.  640; 
Walters  v.  Miller,  1860,  10  la.  427 ;   Higby  v.  Whittaker,  1837,  8  Ohio 
198 ;   Kirby  v.  Harrison,  1853,  2  Ohio  St.  326 ;  59  Am.  Dec.  677.     And 
see  note,  50  Am.  Dec.  678.     But,  obviously,  this  is  not  notice  of  re- 
scission. 

2  See  Ripley  v.  Hazelton,  1870,  3   Daly  (N.  Y.   Ct.   of   Common 
Pleas)  329,  where  VAN  BRUNT,  J.,  said  (p.  330):    "The  necessity  of 
notice  upon  the  rescission  of  a  contract  exists  only,  as  I  understand  the 
law,  when  the  party  rescinding  has  received  some  benefit  or  advantage 
from  the  contract,  which  he  must  surrender  before  he  can  claim  to 
rescind.    He  must  put  the  other  party  in  the  same  position  he  occupied 
before  entering  into  the  contract." 

429 


§  268]  RESTITUTION    AS   ALTERNATIVE   REMEDY         [Part  IV 

[the  vendee]  may  be  able  to  give  a  reasonable  excuse  for  his 
failure  to  fully  perform ;  that  would  entitle  him,  in  equity,  to 
protection  to  the  extent  he  had  performed."  l 

Whether  notice  is  required  or  not,  it  seems  clear  that  an  ac- 
tion for  restitution  need  not  be  preceded  by  a  demand.2  The 
right  arises  upon  the  repudiation  or  breach,  and  is  barred  by  the 
statute  of  limitations  at  the  same  time  as  is  the  right  to  compen- 
sation in  damages.3 

§  268.  (VI)  Measure  of  recovery.  —  The  theory  of  the  remedy 
being  that  the  parties  should  be  placed  substantially  in  statu 
quo,  the  measure  of  recovery  is  the  value  of  the  plaintiff's  per- 
formance. In  case  the  plaintiff  is  allowed  to  recover  without 
first  returning  money  received  by  him  from  the  defendant 
(ante,  §  265),  the  amount  so  received  must,  of  course,  be  de- 
ducted. By  the  weight  of  authority,  while  the  price  or  rate  of 
compensation  fixed  by  the  contract  is  evidence  of  value,4  the 
plaintiff  is  not  restricted  to  such  price  or  rate  but  may  recover 
whatever  he  proves  the  performance  to  have  been  actually 
worth : 


1  Kennedy  v.  Embry,  1888,  72  Tex.  387,  390 ;   10  S.  W.  88 ;  Phil- 
lips v.  Herndon,  1890,  78  Tex.  378 ;   14  S.  W.  857 ;  22  Am.  St.  Rep. 
69. 

2  Thresher  v.  Stonington  Bank,  1896,  68  Conn.  201 ;    36  Atl.  38 ; 
Trinkle  v.  Reeves,  1861,  25  111.  214 ;    76  Am.  Dec.  793 ;   Fay  v.  Fitz- 
patrick,  1905,  130  la.  279 ;    105  N.  W.  398 ;    Raymond  v.  Bearnard, 
1815,  12  Johns.  (N.  Y.)  274;   7  Am.  Dec.  317. 

3  Finch  v.  Parker,  1872,  49  N.  Y.  1. 

4  Reynolds  v.  Jourdan,  1856,  6  Cal.  108  ;  Monarch  v.  Board  of  Comrs., 
1897,  49  La.  Ann.  991 ;   22  So.  259 ;    Rodemer  v.  Hazelhurst,  1850,  9 
Gill  (Md.)  288;    Fitzgerald  v.  Allen,  1880,  128  Mass.  232;    Siebert  v. 
Leonard,  1871,  17  Minn.  433 ;     In  Siebert  v.  Leonard,  supra,  the  court 
said:    "And  as  the  plaintiff  has  the  right  to  insist  that  he  shall  not 
lose  anything  by  the  fault  of  the  defendants  in  thus  preventing  the 
performance  of  the  contract,  he  has  the  right  to  claim  that  he  shall 
receive  as  much  for  such  materials  and  services  as  he  would  have  re- 
ceived for  the  same  if  he  had  gone  on  and  completed  the  special  con- 
tract."    This  goes  too  far.     If  the  plaintiff  wishes  compensation  for 
his  loss,  he  should  not  rescind  the  contract,  but  should  bring  an  action 
for  damages.     If  he  rescinds,  he  is  entitled  only  to  the  fair  value  of  his 
performance  and  has  no  right  "to  insist  that  he  shall  not  lose  anything 
by  the  fault  of  the  defendants." 

430 


Chap.  XIX]  MEASURE   OF   RECOVERY  [§  268 

Fitzgerald  v.  Allen,  1880,  128  Mass.  232 :  LORD,  J.  (p.  234) : 
"The  result  of  the  cases  is,  that,  if  the  special  contract  is  ter- 
minated by  any  means  other  than  the  voluntary  refusal  of  the 
plaintiff  to  perform  the  same  upon  his  part,  and  the  defendant 
has  actually  received  benefit  from  the  labor  performed  and 
materials  furnished  by  the  plaintiff,  the  value  of  such  labor 
and  materials  may  be  recovered  upon  a  count  upon  a  quantuum 
meruit,  in  which  case  the  actual  benefit  which  the  defendant 
receives  from  the  plaintiff  is  to  be  paid  for,  independently 
of  the  terms  of  the  contract.  The  contract  itself  is  at  an  end. 
Its  stipulations  are  as  if  they  had  not  existed.  But  this  does 
not  imply  that  the  contract  may  not  be  put  in  evidence,  and  its 
terms  referred  to,  upon  the  question  of  the  real  value  to  the 
defendant  of  the  plaintiff's  labor  and  materials."  l 

In  some  jurisdictions,  however,  a  failure  to  realize  the  nature 
of  the  remedy  has  led  to  the  illogical  rule  that  the  recovery  must 
be  limited  in  every  case  by  the  contract  price  or  rate.2  That  is 
to  say,  whatever  may  be  the  actual  value  of  the  plaintiff's  per- 
formance, he  should  not  be  permitted  to  recover  more  than  he 
had  agreed  to  take  and  the  defendant  had  agreed  to  pay  for 
such  performance : 

1  Accord:  Valente  v.  Weinberg,  1907,  80  Conn.  134 ;  67  Atl.  369 ;   13 
L.  R.  A.  (N.  S.)  448 ;    Rodemer  v.  Hazelhurst,  1850,  9  Gill  (Md.)  288 ; 
Fitzgerald  v.  Allen,  1880,  128  Mass.  232;    Bailey  v.  Harden,  1906, 
193  Mass.   277 ;    79  N.   E.  257 ;    Kearney  t>.  Doyle,  1871,  22  Mich. 
294 ;  Hemminger  v.  Western  Assurance  Co.,  1893,  95  Mich.  355 ;   54 
N.  W.  949 ;  (but  see  Eakright  v.  Torrent,  1895,  105  Mich.  294 ;    63 
N.   W.  293) ;    McCullough   v.   Baker,  1871,  47   Mo.   401 ;    Smith  v. 
Keith  &  Perry  Coal  Co.,   1889,  36  Mo.  App.  567;    Clark  0.  Man- 
chester, 1872,  51  N.  H.  594 ;   Clark  v.  New  York,  1850,  4  N.  Y.  338 ; 
53  Am.  Dec.  379 ;  Wellston  Coal  Co.  v.  Franklin  Paper  Co.,  1897,  57 
Ohio  St.  182;  48N.E.  888;  Philadelphia  v.  Tripple,  1911,  230  Pa.  St. 
480 ;  79  Atl.  703  ;  Derby  v.  Johnson,  1848,  21  Vt.  17 ;    Chamberlin  v. 
Scott,   1860,  33  Vt.  80.     And  see  United  States  v.  Behan,  1883,  110 
U.  S.  338,  345 ;    4  S.  Ct.  81 ;    Clover  v.  Gottlieb,  1898,  50  La.  Ann. 
568 ;  23  So.  459. 

2  Dobbins  v.  Higgins,  1875,  78  111.  440;    Chicago  v.  Sexton,  1885, 
115  111.  230;    2  N.  E.  263;    Rice  v.  Partello,  1899,  88  111.  App.  52; 
Western  v.  Sharp,  1853,  14  B.  Mon.  (53  Ky.)  144;    Doolittle  v.  Mc- 
Cullough, 1861,  12  Ohio  St.  360,  (but  see  Wellston  Coal  Co  v.  Frank- 
lin Paper  Co.,  1897,  57  Oh.  St.  182;  48  N.  E.  888)  ;   Noyes  v.  Pugin, 
1891,  2  Wash.  653 ;  27  Pac.  548. 

431 


§  268]  RESTITUTION   AS   ALTERNATIVE   REMEDY         [Part  IV 

DooliUle  v.  McCullmtgh,  1861,  12  Ohio  St.  360 :  The  plaintiff 
had  contracted  with  the  defendants  to  make  certain  excavations 
on  a  section  of  railroad  bed  at  eleven  cents  per  cubic  yard.  The 
plaintiff  did  the  least  expensive  part  of  the  work  and  received 
payment  therefor  according  to  the  contract  price,  but  before 
the  plaintiff  completed  performance  the  defendant  repudiated 
the  contract  and  employed  others  to  do  the  work.  Thereupon 
the  plaintiff  rescinded  and  sought  to  recover  twenty  cents 
per  cubic  yard  for  the  work  done,  claiming  that  to  be  its  real 
value.  SUTLIFF,  J.  (p.  366) :  "  But  when  the  special  contract 
is  proved,  whether  by  the  plaintiff,  or  defendant,  under  which 
the  services  were  rendered;  the  special,  and  not  the  implied 
contract  must  determine  the  rights  and  liabilities  of  the  parties 
arising  in  regard  to  the  services.  The  price  having  been  de- 
termined and  mutually  agreed  upon  by  them,  neither  of  the 
parties  can  vary  the  price  so  fixed  by  the  contract.  Nor,  as 
to  the  price  of  the  services  actually  rendered  under  the  contract, 
while  in  force  between  the  parties,  can  it  avail  the  plaintiff, 
bringing  his  action  to  recover  therefor,  that  since  the  rendering 
the  services,  the  defendant  has  put  an  end  to  the  special  contract. 
The  fact  would  still  remain,  that  the  services  were  rendered  under 
a  special  contract,  and  at  the  price  agreed  upon,  and  expressed 
by  the  parties."  1 

1  In  the  later  Ohio  case  of  Wellston  Coal  Co.  v.  Franklin  Paper 
Co.,  1897,  57  Ohio  St.  182  ;  48  N.  E.  888,  the  court  said,  with  reference 
to  Doolittle  v.  McCullough  (p.  186) :  "The  rule  there  stated  may  be 
regarded  as  a  proper  one  in  a  case  where,  as  in  that  case,  it  appears 
from  the  claim  of  the  plaintiff,  that  the  breach  of  the  contract  by  the 
defendant  worked  no  loss,  but  a  benefit  to  him,  on  the  ground,  as  appears, 
that  had  he  been  required  to  complete  the  work,  he  would  have  suffered 
a  much  greater  loss ;  for,  if  the  least  expensive  part  of  the  work  could 
not  have  been  done  without  loss,  it  follows  that  the  doing  of  the  re- 
maining part,  under  the  contract,  would  have  resulted  in  a  still  greater 
loss.  The  action  upon  a  quantum  meruit  is  of  equitable  origin,  and  is 
still  governed  by  considerations  of  natural  justice.  Hence,  when  one 
has  performed  labor  or  furnished  material  under  a  contract  that  is 
wrongfully  terminated  by  the  other  party  before  completion,  the 
question  arises  whether  the  party  not  in  fault  should  be  confined  to 
the  contract  for  what  he  did,  or  to  a  quantum  meruit;  and  this  must 
depend  upon  whether  the  act  of  the  other  party  in  terminating  the  con- 
tract, works  a  loss  or  not  to  him,  regard  being  had  to  the  contract. 
If  it  works  no  loss,  but  is  in  fact  a  benefit,  as  in  the  case  of  Doolittle  v. 
McCullough,  there  are  no  considerations  of  justice  requiring  that  he 

432 


Chap.  XIX]  MEASURE   OF   RECOVERY  [§  268 

Where  the  defendant's  breach  appears  to  have  been  unavoid- 
able, there  is,  perhaps,  no  serious  objection  to  this  limitation, 
except  that  it  disregards  the  fact  that  a  contract  rate  is  fixed 
in  anticipation  of  full  performance,  and  consequently  cannot 
fairly  be  regarded  as  the  rate  agreed  upon  for  part  performance. 
This  is  strikingly  exemplified  in  the  case  of  Wellston  Coal  Co.  v. 
Franklin  Paper  Co.,1  where  it  appeared  that,  under  a  contract  by 
which  the  plaintiff  agreed  to  furnish  coal  for  a  year  at  a  flat  rate 
per  ton,  the  defendant  received  the  coal  during  that  part  of  the 
year  when  the  market  was  above  the  contract  price,  but  broke 
the  contract  when  the  dull  season  arrived  and  the  market  fell 
below  the  contract  price.  Even  if  the  breach  in  that  case  had 
been  unavoidable  it  would  have  been  unjust  to  limit  the  plain- 
should  be  compensated  in  a  greater  sum  for  what  he  did  than  is  stipu- 
lated in  the  contract.  These  considerations  exercised  a  controlling 
influence  in  the  case  just  referred  to.  The  plaintiff  had  a  contract 
with  the  defendant  for  the  making  of  certain  excavations  in  the  con- 
struction of  a  railroad.  He  was  to  receive  for  the  entire  work  eleven 
cents  per  cubic  yard.  He  had  performed  the  least  expensive  part  of 
the  work  when  the  contract  was  wrongfully  terminated  by  the  defendant, 
and  on  this  part,  by  his  own  showing,  he  had  suffered  a  loss.  The 
proof  showed  that  the  performance  of  the  remainder,  being  hardpan, 
would  have  cost  him  a  great  deal  more.  It  was  then  evident,  as  the 
court  observed,  that  he  had  sustained  no  loss  but  a  benefit,  from  the 
termination  of  the  contract  by  the  defendant.  But  in  the  case  before 
us  the  facts  are  very  different.  They  are  in  fact  just  the  reverse. 
The  contract  was  for  the  delivery  of  coal  at  a  price  generally  received 
during  the  dullest  season  of  the  whole  year.  The  defendant  received 
the  coal  during  the  season  when  the  market  was  above  the  contract 
price.  He  had  the  benefit  of  the  difference  between  the  market  and 
the  contract  price ;  but  when  the  dull  season  arrived,  and  the  ad- 
vantages of  the  contract  would  accrue  to  the  plaintiff,  the  defendant 
repudiated  it.  The  difference  between  the  two  cases  is  thus  apparent. 
In  the  case  before  us,  justice  and  fair  dealing  require  that  the  defendant 
having  repudiated  the  contract,  should  pay  the  market  price  for  the 
coal  at  the  time  it  was  delivered  ;  in  the  former  case,  as  the  repudiation 
of  the  contract  by  the  defendant  did  not  enrich  him  to  the  loss  of  the 
plaintiff,  there  were  no  considerations  of  justice  on  which  the  plaintiff 
could  claim  more  than  the  contract  price  for  what  he  had  done  under 
the  contract." 

This  restriction  of  the  rule  to  cases  where  it  appears  that  the  de- 
fendant's breach  or  repudiation  actually  saved  the  plaintiff  from  loss 
reduces  it  almost  to  innocuity. 

1 1897,  57  Ohio  St.  182 ;  48  N.  E.  888. 

433 


§  269]        'RESTITUTION  AS  ALTERNATIVE  REMEDY      [Part  IV 

tiff's  recovery  to  the  contract  price  of  the  coal  delivered.  Where 
the  defendant  has  negligently  failed  or  willfully  refused  to  do 
what  he  contracted  to  do,  or  has  intentionally  interfered  with 
the  plaintiff's  performance,  he  should  certainly  be  compelled 
to  pay  the  full  value  of  what  he  has  received,  even  though  it 
exceeds  the  contract  price.  As  the  court  said  in  Derby  v. 
Johnson : l  "  We  think  the  defendants  have  no  right  to  say 
that  the  contract  which  they  have  thus  repudiated,  shall  still 
subsist  for  the  purpose  of  defeating  a  recovery  by  the  plain- 
tiffs of  the  actual  amount  of  labor  and  materials  they  have 
expended." 

§  269.  Same  :  Effect  of  settlement  or  payment  pro  tanto.  — 
There  are  cases  which  hold  that  if,  before  rescission,  the  plain- 
tiff was  paid  in  full  for  a  distinct  part  of  his  performance  or  there 
was  a  settlement  of  the  amount  due  for  a  distinct  part  of  his 
performance,  such  payment  or  settlement  is  conclusive  and 
he  cannot  show  that  the  performance  was  actually  of  greater 
value : 

Rodemer  v.  Hazelhurst,  1850,  9  Gill  (Md.)  288 :  The  plaintiff 
contracted  to  grade  a  section  of  railroad  for  the  defendants. 
Monthly  estimates  were  to  be  made  of  the  quantity  and  value 
of  the  work  done  during  the  month,  four  fifths  of  which  value 
was  to  be  paid  to  the  plaintiff  immediately,  and  the  balance 
on  completion  of  the  work,  said  estimates  to  be  conclusive 
between  the  parties.  Estimates  and  payments  were  made  for 
several  months,  and  then,  the  defendants  repudiating  the  con- 
tract, the  plaintiff  brought  this  action  for  the  value  of  the  work 
done.  FRICK,  J.  (p.  294) :  "Are  these  adjustments  obligatory 
upon  him,  or  is  the  contract  open  in  its  entirety  to  claim,  as 
he  does  here,  the  fair  and  full  value  of  his  work,  independent 
of  the  prices  regulated  by  the  contract  ?  .  .  .  He  is  concluded 
by  these  settlements,  and  by  reason  of  their  being  closed  as 
distinct  and  separate  portions  of  the  contract,  he  cannot  open 
them  again  to  prove  and  recover  the  actual  value  of  his  work. 
His  claim  has  in  fact  been  liquidated  upon  the  quantity  of  work 
done  and  the  value  ascertained  by  the  prices  in  the  contract, 

1 1848,  21  Vt.  17,  22. 
434 


Chap.  XIX]  MEASURE    OF   RECOVERY  [§  269 

and  he  is  effectually  barred  by  adopting  the  adjustment  and 
receiving  payments  under  them."  1 

This  rule  is  doubtless  a  sound  one  when  applied  to  an  agree- 
ment which  is  severable  in  the  sense  that  it  really  constitutes 
two  or  more  separate  contracts.  But  the  propriety  of  its  ap- 
plication to  cases  like  Rodemer  v.  Hazelhurst 2  and  Doolittle  v. 
McCullough*  is  at  least  questionable.  Payments  pro  tanto  in 
such  cases  are  not  received  in  extinguishment  of  the  defendant's 
liability ;  or,  at  most,  the  extinguishment  is  subject  to  the  con- 
dition that  the  contractor  be  allowed  to  complete  the  job  and 
receive  compensation,  at  the  contract  rate,  for  the  whole  of  it. 
This  is  very  clearly  pointed  out  in  a  New  Hampshire  case : 

Clark  v.  Manchester,  1872,  51  N.  H.  594 :  The  plaintiff,  who 
had  contracted  to  work  as  a  laborer  for  the  defendants  for  a 
year  at  $25  per  month  or  $300  for  the  year,  and  who  had  drawn 
his  salary  for  several  months,  was  discharged  without  cause. 
It  appeared  that  he  had  worked  during  those  months  when  he 
could  have  earned  $30  or  $35  per  month,  whereas  for  the  balance 
of  the  year  he  might  not  be  able  to  earn  more  than  $15  or  $20 
per  month.  SARGENT,  J.  (p.  595) :  "  If  he  had  continued  the 

1  Accord:  Farnum  ».  Kennebec  Water  Dist.,  1909,  170  Fed.  173; 
95  C.  C.  A.  355,  (contract  to  lay  water  pipe) ;  Doolittle  v.  McCullough, 
1861,  12  Ohio  St.  360,  (contract  to  grade  railroad).  And  see  Chicago 
w.  Sexton,  1885,  115  111.  230;  2  N.  E.  263,  (building  contract). 

Professor  Keener  adopts  this  rule  ("  Quasi-Contracts,"  p.  312): 
"If,  however,  under  the  terms  of  the  contract,  the  plaintiff  was  to  be 
paid  for  the  work  as  it  progressed,  and  has  in  fact  been  paid  therefor, 
the  fact  of  the  defendants  subsequently  refusing  to  allow  the  plaintiff 
to  further  perform  cannot  change  the  fact  that  he  has  been  paid  for 
the  part  done  according  to  the  terms  of  the  contract.  If  he  has  suffered 
a  loss  in  consequence  of  the  defendant  putting  an  end  to  the  contract 
at  the  time  he  did,  whereas,  in  fact,  he  would  have  made  a  profit  had  the 
defendant  permitted  him  to  perform  the  contract,  he  has  established 
a  right  to  recover  damages  in  an  action  for  breach  of  contract,  for  re- 
fusing to  allow  him  to  fully  perform  the  contract.  But  the  fact  is 
not  changed  that  he  has  received  in  extinguishment  of  the  defendant's 
liability  that  which  it  was  agreed  before  the  work  was  begun  should 
be  paid  by  the  defendant." 

See  also  Sutherland,  "Damages  "  (2d  ed.),  §  713. 

2 1850,  9  Gill  (Md.)  288. 

3 1861, 12  Ohio  St.  360. 

435 


§  269]  RESTITUTION   AS   ALTERNATIVE   REMEDY         [Part  IV 

year  out,  and  had  gone  every  month  and  received  his  $25, 
that  would  have  completed  the  contract  on  both  sides,  and  that 
sum,  by  the  month  for  the  whole  year,  would  have  been  payment 
in  full  for  his  services;  yet,  when  the  defendants  rescind 
the  contract  in  the  midst  of  the  term,  without  sufficient  cause, 
they  cannot  claim  that  the  payments  which  have  been  made, 
though  at  the  rate  per  month  stipulated  for  the  whole  time,  shall 
be  received  in  full  for  the  services  rendered,  if  those  services 
were  worth  more  for  that  time  than  the  average  for  the  year. 

"The  contract  is  to  be  construed  as  a  whole.  It  is  not  $25 
per  month  for  a  single  month,  or  for  each  separate  month,  or 
for  any  number  of  months  less  than  the  year.  The  contract 
being  entire,  the  defendants  cannot  break  one  part  of  it  and 
still  insist  upon  the  performance  of  the  other  part.  When  the 
defendants  rescinded  the  contract,  they  put  it  out  of  their 
power  to  enforce  it  upon  the  other  party,  but  the  other  party 
may  consider  it  as  rescinded  and  claim  pay  just  as  though  it 
had  never  existed,  which  will  be  just  what  he  is  claiming  here, 
namely,  to  recover  what  his  services  were  worth  for  the  time 
he  labored. 

"The  error  of  the  defendants'  counsel  in  their  brief  is  in  assum- 
ing that  here  was  payment  made  by  the  defendants  and  received 
by  the  plaintiff  in  full  for  the  services  of  each  month.  The 
defendants  cannot  hold  the  plaintiff  to  the  agreed  price  per 
month  only  in  connection  with  the  other  part  of  the  contract, 
viz.  that  the  employment  should  continue  at  the  same  rate  for 
the  whole  year." 


436 


CHAPTER  XX 

ACTION  FOR   RESTITUTION   AS   ALTERNATIVE   REMEDY  FOR  TORT 

§  270.  In  general :  Is  the  obligation  quasi  contractual  ? 

§  271.  (I)  Essential  elements  of  the  obligation  : 

(1)    The  commission  of  a  tort. 

§  272.         (2)    The  receipt  of  a  benefit  by  the  tort-feasor. 
§  273.  Same  :   Must  benefit  consist  of  money  received  ? 

§  274.  Same :    Must  benefit  consist  of  something  taken  from 

injured  party  ? 

§  275.  Same  :   The  taking  of  intangible  things. 

§  276.  (II)  Application  of  doctrine  to  particular  torts. 
§  277.         (1)  Conversion. 

§  278.  Same :   Goods  obtained  by  fraud. 

§  279.  Same :  Goods  or  money  received  from  a  converter. 

§  280.  Same :   Goods  used  and  returned. 

§  281.         (2)  Deceit. 

§  282.  Same :  Inducing  void  marriage  by  false  representations. 

§  283.         (3)  Trespass  on  land. 
§  284.  Same  :   Use  and  occupation. 

§  285.         (4)  Abduction  of  child  or  servant :  Inducing  breach  of  contract. 
§  286.         (5)  False  imprisonment :  Service  under  compulsion. 
§  287.         (6)  Usurpation  of  office. 
§  288.         (7)  Infringement  of  patent  rights. 

§  289.  (Ill)  The  liability  of  joint  tort-feasors. 

§  290.  (IV)  Rights  of  owners  in  common. 

§  291.  (V)  Infancy  or  insanity  as  a  defense  or  in  mitigation.   "> 

§  292.  (VI)  Measure  of  recovery. 
§  293.  Same  :   Interest. 

§  294.  (VII)  Statute  of  limitations. 

§  295.  (VIII)  Effect  of  judgment  against  one  of  two  tort-feasors. 

§  296.  (IX)  Effect  of  judgment  in  favor  of  one  of  two  tort-feasors. 

§  297.  (X)  Effect  of  satisfaction  by  one  of  two  tort-feasors. 

§  298.  (XI)  What  constitutes  an  election. 
§  299.  Same :   The  case  of  joint  tort-feasors. 

§  300.  Same :  The  case  of  successive  converters. 

§  270.    In   general :     Is  the  obligation  quasi  contractual  ?  — 
Upon  the  commission  of  a  tort  an  obligation  always  rests  upon 

437 


§  271]  RESTITUTION   AS   ALTERNATIVE   REMEDY         [Part  IV 

the  tort-feasor  to  compensate  the  person  injured  for  the  damage 
suffered  by  him.  The  commission  of  a  tort,  however,  frequently 
results  not  only  in  damage  to  the  person  injured  but  in  a  benefit 
to  the  tort-feasor.  In  the  case  of  conversion  by  the  wrongful 
sale  of  another's  goods,  for  example,  the  owner  suffers  damage 
to  the  extent  of  the  value  of  the  goods  and  the  converter  is 
benefited  to  the  extent  of  the  sum  realized  by  the  sale.  Where- 
ever  there  is  such  an  enrichment  of  the  wrongdoer  he  is  clearly 
under  a  moral  obligation  (aside  from  the  obligation  to  pay  dam- 
ages) to  make  restitution,  either  in  specie  or  in  value.  Although 
the  injured  party  already  had  an  adequate  remedy  at  law,  it  is 
not  surprising  that  the  courts  came  to  regard  this  moral  obliga- 
tion to  make  restitution  as  analogous  to  a  debt,  and  by  the  famil- 
iar device  of  a  fictitious  promise,  brought  it  within  the  reach  of 
the  simple  and  convenient  remedy  of  indebitatus  assumpsit. 

Is  this  obligation  of  the  tort-feasor,  enforceable  in  assumpsit,  a 
primary  obligation  which  results  from  the  violation  of  another 
primary  obligation,  i.e.  the  obligation  not  to  commit  a  tort? 
Or  is  it,  like  the  obligation  to  pay  damages,  a  secondary  obli- 
gation arising  upon  the  commission  of  a  tort  ?  As  a  matter  of 
legal  theory,  it  seems  more  reasonable  to  say  that  in  these  cases,  as 
in  those  in  which  restitution  is  allowed  as  a  remedy  for  the  repudi- 
ation or  substantial  breach  of  a  contract  (ante,  §  260),  there  is  only 
one  primary  obligation,  and  that  upon  the  violation  of  such  pri- 
mary obligation  the  person  injured  may  elect  to  demand  damages 
or  restitution.  If  this  is  the  true  view,  the  topic  of  the  present 
chapter  belongs  to  the  law  of  torts  or  of  damages.  But,  as  a 
matter  of  fact,  the  obligation  to  make  restitution  has  been  re- 
garded generally  as  a  primary  one ;  and  since,  if  it  is  primary,  it 
obviously  must  be  quasi  contractual,  a  consideration  of  the 
subject  in  this  book  will  not  be  out  of  place. 

§271.  (I)  Essential  elements  of  the  obligation:  (1)  The 
commission  of  a  tort.  —  The  phrase  "  waiver  of  tort,"  commonly 
used  to  denote  the  election  of  assumpsit,  is  unfortunate.  It 
implies  that  the  wrong  is  waived,  which  is  both  inaccurate  and 
misleading.  To  speak  of  a  suit  in  equity  for  the  specific  per- 
formance of  a  contract  as  a  waiver  of  the  breach  would  hardly  be 

438 


Chap.  XX]      RECEIPT   OF   BENEFIT   BY   TORT-FEASOR  [§  273 

more  objectionable.  As  is  pointed  out  in  the  preceding  section 
there  is  in  reality  an  election  between  alternative  obligations 
resulting  from  the  commission  of  a  tort  —  an  obligation  to 
pay  such  damages  as  the  plaintiff  has  suffered,  and  an  obligation 
to  pay  for  such  benefits  as  the  defendant  has  received.  Which- 
ever obligation  is  chosen  to  be  enforced,  there  can  be  no  recovery 
without  proof  of  the  commission  of  a  tort. 

§  272.  (2)  The  receipt  of  a  benefit  by  the  tort-feasor.  —  It  is 
fundamental  that  assumpsit  cannot  be  maintained  against  a 
tort-feasor  unless  it  appears  that  he  has  reaped  a  benefit  from  his 
wrongful  act.1  In  the  consideration  of  this  element  of  the  ob- 
ligation, two  questions  must  be  answered :  first,  must  the  bene- 
fit consist  of  money  received  by  the  tort-feasor  ?  second,  must  the 
benefit  consist  of  something  taken  from  the  party  injured? 

§  273.  Same :  Must  benefit  consist  of  money  received  ?  — 
In  the  cases  in  which  the  fiction  of  a  promise  by  the  tort-feasor 
was  first  indulged,  the  benefit  sought  to  be  recovered  in  assump- 
sit consisted  of  money  realized  from  the  sale  of  the  plaintiff's 
goods.2  It  has  been  contended  that  the  doctrine,  properly 
conceived,  has  no  wider  application ;  or  at  least  that  the  only 
form  of  assumpsit  maintainable  against  the  tort-feasor  is  that 
of  money  had  and  received  to  the  plaintiff's  use.3  This  view 


1  Minor  v.  Baldridge,  1898,  123  Cal.  187 ;  55  Pac.  783 ;  Patterson  v. 
Prior,  1862,  18  Ind.  440 ;   81  Am.  Dee.  367 ;   Fanson  ».  Linsley,  1878, 
20  Kan.  235 ;   National  Trust  Co.  ».  Gleason,  1879,  77  N.  Y.  400 ;   33 
Am.  Rep.  632. 

2  See    Lamine   v.    Dorrell,   1705,  2  Ld.   Raym.   1216 ;     Hitchin  v. 
Campbell,  1772,  2  Wm.  Bl.  827 ;   Hambly  v.  Trott,  1776,  Cowp.  371 ; 
Longchamp  v.  Kenny,  1779,  1  Doug.  137. 

3  Pike  v.  Bright,  1856,  29  Ala.  332 ;   Bowman  v.  Browning,  1856,  17 
Ark.  599;   Woodruff  v.  D.  Zaban  &  Son,  1909,  133  Ga.  24;   65  S.  E. 
123 ;  134  Am.  St.  Rep.  186 ;  Rogers  v.  Greenbush,  1869,  57  Me.  441 ; 
4  Am.  Rep.  292 ;    Quimby  v.  Lowell,  1897,  89  Me.  547  ;  36  Atl.  902  ; 
Jones  v.  Hoar,  1827,  5  Pick.  (Mass.)  285 ;   Watson  v.  Stever,  1872,  25 
Mich.  386 ;   Sandeen  v.  Kansas  City,  etc.,  R.  Co.,  1883,  79  Mo.  278 ; 
Carson  River  Lumbering  Co.  v.  Bassett,  1866,  2  Nev.  249 ;    Smith  v. 
Smith,  1862,  43  N.  H.  536 ;    Willet   v.  Willet,  1834,   3  Watts  (Pa.) 
277 ;    Boyer  v.  Bullard,  1883,  102  Pa.  St.  555 ;   Stearns  v.  DiUingham, 
1850,  22  Vt.  624 ;    Kidder  v.  Sowles,  1872,  44  Vt.  303.     And  see  15 
Am.  &  Eng.  Ency.  of  Law  (2d  ed.)  1116;  4  Cyc.  334,  n.  68. 

439 


§  273]  RESTITUTION   AS   ALTERNATIVE   REMEDY        [Part  IV 

is  taken  in  the  frequently  quoted  Massachusetts  case  of  Jones 
v.  Hoar,1  in  which  Chief  Justice  PARKER  said : 

"  The  whole  extent  of  the  doctrine,  as  gathered  from  the  books, 
seems  to  be,  that  one  whose  goods  have  been  taken  from  him 
or  detained  unlawfully,  whereby  he  has  a  right  to  an  action  of 
trespass  or  trover,  may,  if  the  wrongdoer  sell  the  goods  and 
receive  the  money,  waive  the  tort,  affirm  the  sale,  and  have  an 
action  for  money  had  and  received  for  the  proceeds." 

In  the  majority  of  cases,  as  in  Jones  v.  Hoar,  no  serious  at- 
tempt to  justify  this  limitation  of  the  doctrine  is  made.  Of  the 
arguments  that  have  been  advanced  in  its  favor,  the  opinion  in 
Sandeen  v.  Kansas  City,  St.  Joseph  &  Council  Bluffs  Railroad 
Company?  affords  a  fair  example.  Said  MARTIN,  C.,  speaking 
for  the  court  in  that  case : 

"This  extension  of  the  doctrine  [to  cases  where  converted 
goods  have  not  been  sold  by  the  tort-feasor]  would  tend  to  do 
away  with  the  action  of  tort,  for  perhaps  in  a  majority  of  the 
wrongs  inflicted  the  wrongdoer  receives  some  benefit.  It  is 
generally  with  the  expectation  of  some  benefit  that  he  incurs 
the  liability  of  guilt.  The  inherent  weakness  of  the  doctrine 
consists  in  the  arbitrary  substitution  of  a  promise,  which  cannot 
be  found  in  anything  which  the  party  to  be  charged  has  said  or 
done.  Nothing  could  be  further  from  his  intention  than  an 
actual  promise.  It  is  the  extreme  of  fiction  to  impose  the 
deliberation,  solemnity,  and  obligation  of  a  sale  upon  the  actual 
facts  of  a  highway  robbery." 

Undoubtedly  it  is,  as  the  learned  court  said,  the  extreme  of 
fiction.  But  it  is  likewise  the  extreme  of  fiction  to  declare  that 
the  money  realized  by  a  highway  robber  from  the  sale  of  his 
booty  is  received  by  him  "  to  the  use  "  of  his  victim.  For  that 
matter  the  whole  law  of  quasi  contract,  from  the  remedial  point 
of  view,  depends  upon  the  fiction  that  the  defendant  has  prom- 
ised to  do  that  which  in  justice  he  ought  to  do. 

* 1827,  5  Pick.  (Mass.)  285,  290. 
8 1883,  79  Mo.  278,  282. 

440 


Chap.  XX]      RECEIPT   OF   BENEFIT   BY   TORT-FEASOR  [§  274 

That  the  doctrine  of  election  extends  to  all  cases  in  which  the 
tort  results  in  the  enrichment  of  the  wrongdoer,  whether 'the 
benefit  received  by  him  consists  of  money  or  of  something  else, 
would  seem  to  be  the  broader  and  truer  view.1  And  perhaps 
its  strongest  and  clearest  expression  is  found  in  the  North 
Dakota  case  of  Braithwaite  v.  Aiken,2  in  which  CORLISS,  J.,  said : 

"  But  we  are  of  the  opinion  that  this  limitation  of  the  doctrine 
that  the  tort  may  be  waived  is  without  foundation  in  reason 
or  principle.  The  whole  doctrine  is  built  upon  a  fiction.  It 
asserts  that  what  was  done  in  defiance  of  the  owner's  rights  was 
in  law  done  with  the  most  perfect  regard  for  his  rights ;  that  the 
wrongdoer  has  received  the  money  for  the  owner,  or  that  he  has 
bought  the  property  from  the  owner  at  its  fair  value.  "This 
fiction  is  indulged  only  in  the  interests  of  the  owner,  and  it 
rests  upon  the  receipt  by  the  wrongdoer  of  benefits  accruing 
to  him  from  his  wrongful  acts.  Where  no  benefits  are  received, 
the  liability  is  only  for  the  wrong.  As  this  right  in  the  injured 
party  to  turn  the  tort  liability  into  a  contract  liability  stands 
upon  the  receipt  of  benefits  by  the  wrongdoer,  is  it  not  beneath 
the  dignity  of  any  tribunal  to  draw  a  distinction  between  the 
receipt  of  benefits  in  the  shape  of  cash  and  the  receipt  of  benefits 
in  the  form  of  property  ?  In  our  judgment  the  fact  that  a  sale 
has  not  been  made  is  unimportant." 

§  274.  Same  :  Must  benefit  consist  of  something  taken  from 
injured  party  ?  —  Perhaps  it  was  arguable  at  one  time  that  the 
obligation  of  a  tort-feasor  in  assumpsit  is  analogous  to  that  of  a 

1  Roberts  v.  Evans,  1872,  43  Cal.  380 ;  Toledo,  etc.,  R.  Co.  v.  Chew, 
1873,  67  111.  378 ;  Fanson  v.  Linsley,  1878,  20  Kan.  235 ;  Aldine  Mfg. 
Co.  v.  Barnard,  1891,  84  Mich.  632 ;  48  N.  W.  280,  (but  cf.  Tuttle  v. 
Campbell,  1889,  74  Mich.  652,  662;  42  N.  W.  384;  16  Am.  St. 
Rep.  652 ;  Brown  v.  Foster,  1904,  137  Mich.  35 ;  100  N.  W.  167) ; 
Downs  v.  Finnegan,  1894,  58  Minn.  112;  59  N.  W.  981;  49  Am. 
St.  Rep.  488 ;  Crane  v.  Murray,  1904,  106  Mo.  App.  697 ;  80  S.  W. 
280 ;  Hirsch  v.  Leatherbee  Lbr.  Co.,  1903,  69  N.  J.  L.  509 ;  55  Atl. 
645  ;  Terry  v.  Munger,  1890,  121  N.  Y.  161 ;  24  N.  E.  272 ;  8  L.  R.  A. 
216 ;  18  Am.  St.  Rep.  803 ;  Braithwaite  v.  Aiken,  1893,  3  N.  D.  365 ; 
56  N.  W.  133 ;  Norden  v.  Jones,  1873,  33  Wis.  600 ;  14  Am.  Rep.  782. 
And  see  15  Am.  &  Eng.  Ency.  of  Law  (2d  ed.)  1116 ;  4  Cyc.  334,  n.  69. 

2 1893,  3  N.  D.  365,  370 ;  56  N.  W.  133. 

441 


§  275]  RESTITUTION    AS   ALTERNATIVE   REMEDY         [Part  IV 

constructive  trustee  and  that  he  should  be  held  accountable 
for  any  profits  derived  by  him  from  his  wrongful  act.  It  seems 
to  be  now  taken  for  granted,  however,  that  the  obligation  is 
not  to  account  for  profits  but  to  make  restitution.  It  follows 
that  it  is  not  enough  to  show  that  the  defendant  has  been  en- 
riched by  his  wrong;  it  must  further  appear  that  the  benefit 
received  by  him  has  been  taken  from  the  plaintiff.  As  Professor 
Keener  puts  it,  there  must  be  "  not  only  a  plus,  but  a  minus 
quantity." 

§  275.  Same :  The  taking  of  intangible  things.  —  Usually, 
if  something  has  in  reality  been  taken  from  the  plaintiff,  the 
fact  is  obvious.  But  where  the  tort  consists  of  a  wrongful  use 
of  another's  property,  and  especially  if  it  appears  that  the  use 
has  not  been  exclusive  of  the  owner's  use,  or  that  the  property 
would  not  have  been  used  by  its  owner  in  any  event,  the  minus 
quantity  is  less  easily  seen.  Such  a  case  was  Phillips  v.  Horn- 
fray,1  a  suit  in  equity  in  which  the  defendants  were  charged, 
among  other  things,  with  the  wrongful  use  of  the  plaintiff's 
underground  roadway  for  the  conveyance  of  coal  and  ironstone. 
One  of  the  defendants,  R.  Fothergill  by  name,  having  died,  it 
was  contended  that  his  executrix  could  not  be  held  liable.  The 
court  so  held,  and  after  stating  that  "  the  true  test  to  be  applied 
in  the  present  case  is  whether  the  plaintiff's  claim  against  the 
deceased  R.  Fothergill  .  .  .  belongs  to  the  category  of  actions 
ex  delicto,  or  whether  any  form  of  action  against  the  executors 
of  the  deceased,  or  the  deceased  man  in  his  lifetime,  can  be  based 
upon  any  implied  contract  or  duty,"  said: 

"The  deceased,  R.  Fothergill,  by  carrying  his  coal  and  iron- 
stone in  secret  over  the  Plaintiffs'  roads  took  nothing  from  the 
Plaintiffs.  The  circumstances  under  which  he  used  the  road 
appear  to  us  to  negative  the  idea  that  he  meant  to  pay  for  it. 
Nor  have  the  assets  of  the  deceased  Defendant  been  necessarily 
swollen  by  what  he  has  done.  He  saved  his  estate  expense, 
but  he  did  not  bring  into  it  any  additional  property  or  value 
belonging  to  another  person." 

1 1883,  24  Ch.  D.  439,  460,  462. 
442 


Chap.  XX]      RECEIPT   OF   BENEFIT   BY  TORT-FEASOR  [§  275 

But  did  not  Fothergill  take  something  of  value  from  the 
plaintiff?  The  plaintiff,  as  owner  of  the  road,  was  entitled  to 
its  uninterrupted  and  exclusive  use.  This  "  exclusive  use  " 
was  something  that  belonged  to  him ;  it  was  something  that  he 
might  dispose  of,  or  actively  exercise,  or  passively  contemplate 
as  his  own.  And  every  time  that  Fothergill  used  the  road, 
whether  such  use  interfered  with  the  plaintiff's  active  employ- 
ment of  it  or  not,  he  temporarily  deprived  the  plaintiff  of  his 
"  exclusive  use  "  just  as  truly  as  a  converter  of  goods  deprives 
the  owner  of  his  possession.  It  follows  that  to  the  extent  of  the 
value  of  Fothergill's  use  he  was  under  an  obligation  to  make 
restitution. 

Another  case  in  which  the  court  appears  to  have  been  misled 
by  the  intangible  character  of  the  thing  taken  by  the  defendant 
is  Schillinger  v.  United  States.1  The  plaintiffs  held  a  patent 
for  a  mode  or  process  of  constructing  concrete  pavement  with  free 
joints.  The  defendant,  the  United  States,  against  the  protest 
of  the  patentee,  awarded  a  contract  for  the  construction  of  such 
a  concrete  pavement  to  one  Cook,  who  wrongfully  used  the  mode 
or  process  of  the  plaintiffs.  An  action  for  infringement  was 
brought  against  the  United  States  in  the  Court  of  Claims,  and 
judgment  demanded  for  the  sum  alleged  to  have  been  saved  by 
the  use  of  the  patented  process.  The  court  decided  that  the 
action  sounded  in  tort  alone ;  that  there  was  no  contract  express 
or  implied  on  the  part  of  the  government  for  the  use  of  the 
patent;  and  that  consequently  the  case  was  not  within  the 
jurisdiction  conferred  by  statute  upon  the  court.  Upon  appeal 
to  the  United  States  Supreme  Court,  the  decision  was  sustained, 
Mr.  Justice  BREWER  saying:2 

"It  may  be  that  the  process  or  mode  by  which  Cook,  the 
contractor,  constructed  the  pavement  in  the  Capitol  grounds 
was  that  described  in  and  covered  by  the  Schillinger  patent. 
He  may,  therefore,  have  been  an  mfringer  by  using  that  process 

1 1894,  155  U.  S.  163 ;  15  S.  Ct.  85.  See  B.  F.  Avery  &  Sons  v. 
McClure,  1909,  94  Miss.  172 ;  47  So.  901,  902 ;  22  L.  R.  A.  (N.  S.) 
256. 

2  At  page  171. 

443 


§  275]  RESTITUTION   AS   ALTERNATIVE   REMEDY         [Part  IV 

or  mode  in  the  construction  of  the  pavement,  and  liable  to  the 
claimants  for  the  damages  they  have  sustained  in  consequence 
thereof.  It  may  be  conceded  also  that  the  government,  as 
having  at  least  consented  to  the  use  by  Cook  of  such  process 
or  method  in  the  construction  of  the  pavement,  is  also  liable 
for  damages  as  a  joint  tort-feasor.  But  what  property  of  the 
claimants  has  the  government  appropriated  ?  It  has,  and  uses, 
the  pavement  as  completed  in  the  Capitol  grounds,  but  there 
is  no  pretense  of  a  patent  to  the  pavement  as  a  completed  struc- 
ture. When  a  contractor,  in  the  execution  of  his  contract, 
uses  any  patented  tool,  machine,  or  process,  and  the  govern- 
ment accepts  the  work  done  under  such  contract,  can  it  be  said 
to  have  appropriated  and  be  in  possession  of  any  property  of 
the  patentee  in  such  a  sense  that  the  patentee  may  waive  the 
tort  and  sue  on  an  implied  promise  ?  The  contractor  may  have 
profited  by  the  use  of  the  tool,  machine,  or  process,  but  the 
work,  as  completed  and  enjoyed  by  the  government,  is  the 
same  as  though  done  by  a  different  and  unpatented  process, 
tool,  or  machine.  Take  for  illustration,  a  patented  hammer 
or  trowel.  If  the  contractor  in  driving  nails  or  laying  bricks 
use  such  patented  tools,  does  any  patent  right  pass  into  the 
building,  and  become  a  part  of  it,  so  that  he  who  takes  the  build- 
ing can  be  said  to  be  in  the  possession  and  enjoyment  of  such 
patent  right  ?  Even  if  it  be  conceded  that  Cook,  in  the  doing 
of  this  work,  used  tar  paper,  or  its  equivalent,  to  separate  the 
blocks  of  concrete,  and  thus  finally  completed  a  concrete  pave- 
ment in  detached  blocks  or  sections,  was  such  completed  pave- 
ment any  different  from  what  it  would  have  been  if  the  separa- 
tion between  the  blocks  had  been  accomplished  in  some  other 
way;  and  is  the  government  now  in  possession  or  enjoyment 
of  anything  embraced  within  the  patent  ?  Do  the  facts,  as 
stated  in  the  petition  or  as  found  by  the  court,  show  anything 
more  than  a  wrong  done,  and  can  this  be  adjudged  other  than 
a  case  '  sounding  in  tort'  ?  " 

Whether  the  case  sounded  in  tort  alone,  or  arose  upon  an 
implied  contract,  depends  upon  the  construction  of  the  phrase 
"  contracts,  express  or  implied  "  in  the  statute  defining  the 
jurisdiction  of  the  Court  of  Claims.  But  if  it  be  assumed,  as 
the  court  appears  to  have  assumed,  that  the  phrase  includes  the 

444 


Chap.  XX]  APPLICATION   OF  DOCTRINE  [§  276 

obligation  of  a  tort-feasor  to  make  restitution,  the  conclusion 
reached  by  the  court,  it  is  respectfully  submitted,  is  erroneous. 
The  United  States,  it  is  true,  did  not  deprive  the  patentee  of 
any  tangible  or  visible  property;  but  it  joined  with  the  con- 
tractor in  wrongfully  taking  from  the  patentee  the  "exclusive 
use"  of  his  invention,  and  if  the  allegation  of  the  petition  as 
to  the  amount  saved  to  the  government  by  the  use  of  the  in- 
vention was  true,  the  booty  was  not  all  left  to  the  contractor. 

In  the  New  York  Common  Pleas  case  of  McSorley  v.  Faulk- 
ner,1 which  presented  the  same  difficulty,  a  more  satisfactory 
result  was  reached.  The  plaintiff  had  a  telephone  installed 
in  his  place  of  business  under  a  contract  by  which  he  agreed  to 
pay  the  telephone  company  for  its  use  for  a  stated  period.  Sub- 
sequently he  sold  his  business  to  the  defendants  and  left  the 
telephone  in  the  premises.  The  defendants  used  the  telephone 
constantly  during  the  remainder  of  the  period  stipulated  in  the 
contract  with  the  company.  The  plaintiff  paid  the  company 
for  the  use  of  the  phone  during  the  defendants'  occupancy,  in 
accordance  with  his  contract,  and  in  this  action  was  allowed  to 
recover  an  equivalent  sum  from  the  defendants.  Assuming 
that  the  use  of  the  telephone  by  the  defendants  constituted  a 
tort,  the  decision,  it  is  submitted,  is  sound.  The  plaintiff  was 
entitled  to  the  exclusive  use  of  the  instrument,  and  although  by 
leaving  it  in  the  premises  he  may  have  put  it  out  of  his  power 
actively  to  employ  it,  he  nevertheless  retained  the  ownership 
of  the  exclusive  use.  Consequently,  every  time  the  defendants 
employed  the  instrument  they  took  from  the  plaintiff  his  ex- 
clusive use,  and  to  the  extent  of  the  value  of  such  use  they  were 
under  obligation  to  make  restitution. 

§  276.  (II)  Application  of  doctrine  to  particular  torts.  — 
Although  most  frequently  employed  as  a  remedy  for  the  con- 
version of  goods,  the  action  of  assumpsit  is  available  in  a  number' 
of  other  cases.  For  the  sake  of  clearness,  the  following  torts  to 
which  the  doctrine  applies  will  be  separately  considered : 

1.  Conversion. 

2.  Deceit. 

1  1892,  18  N.  Y.  Supp.  460. 
445 


§  277]  RESTITUTION   AS   ALTERNATIVE   REMEDY         [Part  IV 

3.  Trespass  on  land. 

4.  Abduction  of  child  or  servant :  inducing  breach  of  contract. 

5.  False  imprisonment :   services  under  compulsion. 

6.  Usurpation  of  office. 

7.  Infringement  of  patent  rights. 

§277.  (1)  Conversion. — The  tort  of  conversion,  for  the 
purpose  of  this  discussion,  may  be  said  to  consist  of  either  (a) 
the  wrongful  destruction  of  personal  property,  or  (6)  the  wrong- 
ful taking,  retention,  use,  or  disposition  of  personal  property. 
In  cases  of  the  first  class,  the  wrongdoer  derives  no  benefit  from 
his  act  and  the  only  remedy  against  him  is  an  action  for  dam- 
ages.1 In  cases  of  the  second  class,  the  wrongdoer  is  commonly 
enriched,  and  to  the  extent  of  the  benefit  received  by  him  may 
be  obliged  to  make  restitution.  This  obligation  is  everywhere 
recognized,  in  case  the  converter  sells  the  property  and  receives 
the  proceeds  of  the  sale.2  And  though,  as  has  been  pointed  out 
(ante,  §  273),  there  is  authority  for  confining  the  doctrine  to 
cases  in  which  the  count  for  money  had  and  received  is  avail- 
able, the  better  rule  is  that  restitution  may  be  demanded,  in- 
stead of  damages,  even  where  the  wrongdoer  retains  or  consumes 
the  goods.3 

In  jurisdictions  where  it  is  insisted  that  the  count  for  money 
had  and  received  is  the  only  form  of  assumpsit  that  may  be 

1  See  Reynolds  ».  Padgett,  1894,  94  Ga.  347 ;  21  S.  E.  570. 

2  Bettis  v.  McNider,  1903,  137  Ala.  588 ;    34  So.  813 ;    97  Am.  St. 
Rep.  59;    Jester  v.  Notts,  1904,  57  Atl.  1904,  (Del.);    Bates-Farley 
Sav.  Bank  v.  Desmukes,  1899,  107  Ga.  212;    33  S.  E.  175;    Staat  v. 
Evans,  1864,  35  111.  455 ;   Leighton  v.  Preston,  1850,  9  Gill  (Md.)  201 ; 
Johnson-Brinkham  Co.  v.  Central  Bank,  1893,  116  Mo.  558;   22  S.  W. 
813 ;  38  Am.  St.  Rep.  615 ;  Seavey  v.  Dana,  1881,  61  N.  H.  339 ;  Olive 
v.   Olive,  1886,   95  N.  C.  485 ;    Pryor  v.   Morgan,  1895,  170  Pa.  St. 
568 ;  33  Atl.  98.     See  also  cases  ante,  §  273,  and  4  Cyc.  332,  n.  67. 

.  3  Roberts  v.  Evans,  1872,  43  Cal.  380 ;  City  of  Elgin  v.  Joslyn,  1891, 
136  111.  525;  26  N.  E.  1090;  Cooper  v.  Helsabeck,  1838,  5  Blackf. 
(Ind.)  14;  Crane  v.  Murray,  1904,  106  Mo.  App.  697;  80  S.  W.  280; 
Harman  v.  Loscalzo,  1910,  125  N.  Y.  Supp.  517;  Tidewater  Quarry 
Co.,  v.  Scott,  1906,  105  Va.  160;  52  S.  E.  835;  115  Am.  St.  Rep.  864; 
Walker  ».  Norfolk,  etc.,  R.  Co.,  1910,  67  W.  Va.  273;  67  S.  E.  722; 
Heber  v.  Estate  of  Heber,  1909,  139  Wis.  472  ;  121  N.  W.  328.  See  also 
cases  cited  ante,  §  273,  and  4  Cyc.  334,  n.  69. 

446 


Chap.  XX]  CONVERSION  [§  278 

employed  against  a  tort-feasor,  restitution  cannot  be  enforced 
in  case  the  goods  have  been  disposed  of  by  barter,  instead  of  by 
sale.1  With  the  obvious  purpose  of  avoiding  the  limitation, 
however,  it  has  been  held  that  where  the  property  taken  by  the 
converter  in  exchange  for  the  converted  goods  "  is  received  as 
money  or  as  money's  worth  [i.e.  at  an  agreed  money  valuation] 
the. plaintiff  may  elect  so  to  treat  it  and  recover  accordingly." 
And  in  one  case  the  court  went  so  far  as  to  hold  that  the  promise 
of  a  purchaser  from  the  converter  to  pay  for  the  goods  may  be 
deemed  to  have  been  accepted  by  the  converter  as  the  equiva- 
lent of  money.3 

Where  the  conversion  consists  of  the  wrongful  taking  or  de- 
tention of  money,  or  of  negotiable  paper  received  as  money,  it  is 
obvious  that  the  count  for  money  had  and  received  is  immedi- 
ately available  against  the  wrongdoer.4 

§  278.  Same  :  Goods  obtained  by  fraud.  —  There  appears  to 
be  little  difference  between  the  position  of  one  who  has  obtained 
goods  by  means  of  a  fraudulent  contract  of  purchase,  subse- 
quently disaffirmed  by  the  seller,  and  the  position  of  one  who 
has  taken  goods  by  force.  In  both  cases  the  wrongdoer  is 
guilty  of  conversion ; 5  in  both  cases  the  tort  results  in  a  benefit 

1  Fuller  v.  Duren,  1860,  36  Ala.  73 ;   76  Am.  Dec.  318 ;   Kidney  v. 
Persons,  1868,  41  Vt.  386 ;   98  Am.  Dec.  595 ;    Saville  v.  Welch,  1886, 
58  Vt.  683 ;  5  Atl.  491. 

2  Strickland  ».  Burns,  1848,  14  Ala.  511,  515;  Miller  v.  Miller,  1828, 
7  Pick.  (Mass.)  133  ;  19  Am.  Dec.  264.     And  see  cases  cited  in  preceding 
note. 

3  Burton  Lbr.  Co.  v.  Wilder,  1895,  108  Ala.  669 ;    18  So.  552. 
4Neate  v.  Harding,  1851,  6  Exch.  349;    First  Nat.  Bank  v.  Henry, 

1905,  159  Ala.  367 ;  49  So.  97 ;  Mason  v.  Waite,  1822,  17  Mass.  560 ; 
Tryon  v.  Baker,  1873,  7  Lans.  (N.  Y.  Sup.  Ct.)  511 ;  Boyle  v.  Staten 
Island,  etc.,  Land  Co.,  1897,  17  App.  Div.  624;  45  N.  Y.  Supp.  496; 
aff.  1900,  163  N.  Y.  586;  57  N.  E.  1104;  Hornefius  v.  Wilkinson,  1908, 
51  Or.  45 ;  93  Pac.  474 ;  Gould  v.  Baker,  1896,  12  Tex.  Civ.  App.  669 
35  S.  W.  708;  Elwell  v.  Martin,  1859,  32  Vt.  217;  Lawson's  Exr.  v. 
Lawson,  1861,  16  Gratt.  (Va.)  230;  80  Am.  Dec.  702.  Cf.  Smith  v. 
Smith,  1862,  43  N.  H.  536. 

5  Farwell  v.  Hanchett,  1887,  120  111.  573;  11  N.  E.  875;  Thurston 
v.  Blanchard,  1839,  22  Pick.  (Mass.)  18 ;  33  Am.  Dec.  700 ;  Baird  v. 
Howard,  1894,  51  Ohio  St.  57  ;  36  N.  E.  732  ;  22  L.  R.  A.  846  ;  46  Am. 
St.  Rep.  550;  Kryn  v.  Kahn,  1903,  54  Atl.  870,  (N.  J.  Sup.  Ct.). 

447 


§  278]  RESTITUTION   AS   ALTERNATIVE   REMEDY         [Part  IV 

to  him  (see  ante,  §§271,  272).  Therefore,  a  fraudulent  pur- 
chaser, in  case  the  seller  avoids  the  contract,  should  be  suable 
in  either  trover  or  assumpsit.  This  is  the  rule  in  some  juris- 
dictions.1 Says  the  Kentucky  Court  of  Appeals,  in  Dietz's 
Assignee  v.  Sutcliffe : 2 

"Nor  do  we  see  how it  is  possible  to  say  that  the 

plaintiffs,  on  repudiating  the  contract  for  fraud,  had  not  their 
election  between  contract  and  tort  as  to  the  form  of  action. 
The  remaining  question  is,  what  is  the  effect  of  a  waiver  of  the 
tort  ?  '  Does  it  restore  the  express  contract  which  has  been 
repudiated  for  the  fraud,  or  does  it  leave  the  parties  in  the 
same  condition  as  if  no  express  contract  had  been  made  —  to 
such  relations  as  result  by  implication  of  law  from  the  delivery 
of  goods  by  the  plaintiff  and  their  possession  by  the  de- 
fendant ?  On  this  subject  the  decisions  are  conflicting,  but  I 
think  the  weight  of  authority,  as  well  as  the  true  and  logical 
effect  of  the  acts  of  the  parties,  is  to  leave  the  parties  to  stand 
upon  the  rights  and  obligations  resulting  from  the  delivery  and 
possession  of  the  goods." 

But  there  are  cases  to  the  contrary.3  In  the  most  conspicu- 
ous of  them,  Ferguson  v.  Carrington*  where  it  appeared  that  the 

1  Dietz's  Assignee  v.  Sutcliffe,  1883,  80  Ky.  650 ;  Roth  v.  Palmer,  1858, 
27  Barb.  (N.  Y.  Sup.  Ct.)  652;  Crown  Cycle  Co.  v.  Brown,  1901,  39 
Or.  285 ;  64  Pac.  451.  See  Williston,  "Sales,"  §  648. 

2 1883,  80  Ky.  650,  654. 

3  Ferguson  v.  Carrington,  1829,  9  Barn.  &  Cr.  59,  (cf.  Hill  v.  Perrott, 
1810,  3  Taunt.  274 ;  Abbotts  v.  Barry,  1820,  2  Brod.  &  Bing.  369) ; 
Bechtel  ».  Chase,  1909,  156  Cal.  707,  711-12;  106  Pac.  81;  Kellogg 
v.  Turpie,  1879,  93  111.  265 ;  34  Am.  Rep.  163 ;  Allen  v.  Ford,  1837, 
19  Pick.  (Mass.)  217  ;  Bedier  v.  Fuller,  1895,  106  Mich.  342 ;  64  N.  W. 
331,  (The  rule  in  Michigan  was  changed  by  statute  in  1897  :  see  Mich. 
Comp.  Laws,  §  10,421 ;  Anderson  Co.  v.  Pungs,  1903,  134  Mich.  79 ; 
95  N.  W.  985.).  And  see  Jones  ».  Brown,  1895,  167  Pa.  St.  395;  31 
Atl.  647. 

In  Emerson  v.  Detroit,  etc.,  Spring  Co.,  1894,  100  Mich.  127,  133 ; 
58  N.  W.  659,  the  court  said:  "It  is  suggested  that,  as  a  fraud  was 
perpetrated  upon  the  creditor,  he  would  have  the  right  to  waive  the 
tort  and  sue  in  assumpsit.  But  we  are  aware  of  no  case  which  au- 
thorizes a  party  to  first  turn  a  contract  into  a  tort,  and  then  shift  it 
back  into  the  form  of  a  new  contract  other  than  the  original  one." 

4 1829,  9  Barn.  &  Cr.  59. 

448 


Chap.  XX]  CONVERSION  [§  278 

plaintiffs  had  been  induced  by  the  fraudulent  representations 
of  the  defendant  to  sell  him  goods  on  credit,  it  was  held  that  an 
action  for  goods  sold  and  delivered  could  not  be  maintained  until 
the  expiration  of  the  credit  given  in  the  contract.  Lord  TENTER- 
DON,  C.  J.,  with  whom  all  of  the  judges  concurred,  declared  that : 

"It  was  competent  to  the  plaintiffs  to  have  brought  trover, 
and  to  have  treated  the  contract  as  a  nullity,  and  to  have  con- 
sidered the  defendant  not  as  a  purchaser  of  the  goods,  but  as  a 
person  who  had  tortiously  got  possession  of  them ;  but  that  the 
plaintiffs  by  bringing  assumpsit  had  affirmed  that,  at  the  time 
of  the  action  brought,  there  was  a  contract  existing  between 
them  and  the  defendant.  The  only  contract  proved,  was  a 
sale  of  goods  on  credit.  The  time  of  the  credit  had  not  expired, 
and  consequently  the  action  was  brought  too  soon." 

The  fallacy  of  this  argument  is  apparent.  The  bringing  of  an 
action  for  goods  sold  and  delivered  against  a  buyer  does  not 
necessarily  affirm  the  contract  of  sale.  The  action  referred  to 
is  both  a  contractual  remedy  and  an  alternative  remedy  in 
certain  cases  of  tort.  As  has  been  seen  (ante,  §  277),  it  may  be 
used  against  one  who  converts  the  plaintiff's  property  by  force 
and  without  the  semblance  of  a  contract.  And,  in  the  case  under 
discussion,  the  circumstance  of  the  commencement  of  the  action 
before  the  expiration  of  the  credit  stipulated  for  in  the  contract 
makes  it  obvious  that  the  plaintiffs  were  not  using  the  action  as 
a  vehicle  for  the  enforcement  of  their  contractual  rights.  They 
had  repudiated  the  contract  because  of  the  buyer's  fraud,  and 
then  had  elected  the  remedy  of  assumpsit  for  goods  sold  and 
delivered,  instead  of  the  remedy  of  trover. 

One  who  wishes  to  avoid  a  contract  on  the  ground  of  fraud 
must  ordinarily  restore  to  the  other  party  anything  he  may  have 
received  in  performance  of  the  contract.  Consequently,  one 
who  is  induced  by  fraudulent  representations  to  exchange  per- 
sonal property  cannot  recover  the  value  of  the  property  parted 
with,  upon  the  theory  of  "  waiver  of  tort  and  suit  in  assumpsit," 
while  retaining  the  property  received  by  him  in  the  exchange.1 

1  See  Bechtel  i>.  Chase,  1909,  156  Cal.  707 ;  106  Pac.  81. 
449 


§  279]  RESTITUTION   AS   ALTERNATIVE   REMEDY         [Part  IV 

§  279.  Same :  Goods  or  money  received  from  a  converter.  - 
One  who  has  acquired  converted  goods,  either  with  notice  of  the 
conversion  or  without  paying  value,  is  himself  guilty  of  conver- 
sion, and  to  the  extent  of  the  benefit  derived  from  his  wrong  may 
be  called  upon  for  restitution.1  If  he  has  not  paid  for  the  goods, 
he  is  ordinarily  benefited  to  the  extent  of  the  value  of  the  goods, 
or  in  case  of  a  resale  by  him,  to  the  extent  of  the  price  realized 
from  such  resale.2  If  he  has  paid  for  the  goods,  but  with  notice 
of  the  conversion,  he  is  ordinarily  benefited  only  to  the  extent 
that  either  the  value  of  the  goods,  or  the  sum  realized  upon  a 
resale,  exceeds  the  amount  paid  by  him.3 

Even  a  bona  fide  purchaser  for  value  of  converted  goods  is 
liable  for  conversion  unless,  in  making  the  purchase,  he  relies 
upon  an  apparent  ownership  or  apparent  authority  to  sell 
with  which  the  seller  has  been  clothed  by  the  owner.  Where 
he  is  liable  as  a  tort-feasor,  there  is  no  objection  to  the 
election  of  assumpsit  for  goods  sold  and  delivered  as  a  means 
of  recovering  from  him  the  value  of  the  goods  minus  the 
price  paid  by  him,  which  would  ordinarily  be  the  extent  of 
the  benefit  received  by  him.  But  there  are  cases  in  which  a 
recovery  of  the  full  value  of  the  goods  converted  has  been 
allowed.4 

One  who  receives  money  which  has  been  wrongfully  taken 

1  Bettis  v.  McNider,  1903,  137  Ala.  588 ;  34  So.  813 ;  97  Am.  St. 
Rep.  59 ;   Roberts  v.  Evans,  1872,  43  Cal.  380 ;  McArthur  v.  Murphy, 
1898,  74  Minn.  53  ;  76  N.  W.  955  ;  Seavey  v.  Dana,  1881,  61  N.  H.  339. 
See  Berkshire  Glass  Co.  v.  Wolcott,  1861,  2  Allen  227 ;   79  Am.  Dec. 
781,  (no  recovery  unless  converter  has  sold  goods  and  received  money 
therefor). 

2  Bettis  v.  McNider,  1903,  137  Ala.  588 ;   34  So.  813,  815 ;    97  Am. 
St.  Rep.  59 ;  McArthur  v.  Murphy,  1898,  74  Minn.  53 ;  76  N.  W.  955 ; 
Seavey  v.  Dana,  1881,  61  N.  H.  339. 

3  Greer  v.  Newland,  1904,  70  Kan.  315 ;   78  Pac.  835 ;   70  L.  R.  A. 
554 ;   109  Am.  St.  Rep.  424,  (reversing  70  Kan.  310) ;  77  Pac.  98.     But 
see  Roberts  v.  Evans,  1872,  43  Cal.  380 ;  Sage  v .  Shepard,  etc.,  Lbr. 
Co.,  1896,  4  App.  Div.  290;  39  N.  Y.  Supp.  449,  aff.  1899,  158  N.  Y. 
672;  52  N.  E.  1126. 

4  Sage  v.  Shepard,  etc.,  Lbr.  Co.,  1896,  4  App.  Div.  290 ;   39  N.  Y. 
Supp.  449,  aff.  1899,  158  N.  Y.  672 ;  52  N.  E.  1126.     And  see  Roberts 
v.  Evans,  1872,  43  Cal.  380. 

450 


Chap.  XX]  CONVERSION  [§  280 

from  its  owner,  either  with  notice  of  the  wrong  or  without 
paying  value,  may  be  sued  for  money  had  and  received.1  But 
one  who  receives  money  innocently  and  for  value  is  always 
protected,2  "  as  it  would  be  mischievous  to  require  persons,  who 
receive  money  in  the  way  of  business,  or  in  payment  of  debts, 
to  look  into  the  authority  of  him  from  whom  they  receive 
it."  3 

§  280.  Same  :  Goods  used  and  returned.  —  There  is  no  doubt 
that  the  detention  of  another's  goods,  if  based  upon  a  negation 
of  the  owner's  rights,  is  a  conversion  even  though  the  goods  are 
ultimately  returned.4  It  is  equally  clear  that  whether  or  not 
the  owner  would  have  actually  employed  the  goods,  had  they 
been  in  his  possession,  the  converter  has  deprived  him  of  his 
"  exclusive  use  "  (ante,  §  274),  and  to  the  extent  of  the  value  of 
the  use  has  enriched  himself  at  the  owner's  expense.  Accord- 
ingly, it  is  held  that  the  owner  may  resort  to  the  fiction  of  a 

1  Clarke  v.  Shee,  1774,  Cowp.  197 ;   Calland  v.  Lloyd,  1840,  6  Mees. 
v.  Wels.  26 ;  Heilbut  v.  NeviU,  1870,  L.  R.  5  C.  P.  478 ;  Bayne  v.  United 
States,  1876,  93  U.  S.  642 ;   Zink  ».  Wells,  Fargo  &  Co.,  1897,  72  111. 
App.  605 ;  Mason  v.  Waite,  1822,  17  Mass.  560 ;  City  of  Newburyport 
v.  Spear,  1910,  204  Mass.  146 ;  90  N.  E.  522 ;   134  Am.  St.  Rep.  652 ; 
York  v.  Farmers'  Bank,  1904,  105  Mo.  App.  127 ;   79  S.  W.  968,  971 ; 
Brundred  v.  Rice,  1892,  49  Ohio  St.  640;   32  N.  E.  169;   34  Am.  St. 
Rep.  589 ;   Hindmarch  v.  Hoffman,  1889,  127  Pa.  St.  284 ;   18  Atl.  14 ; 
4  L.  R.  A.  368 ;   14  Am.  St.  Rep.  842. 

2  State  Bank  v.  United  States,  1884,  114  U.  S.  401 ;   5  S.  Ct.  888; 
Alabama  Nat.  Bank  v.  Rivers,  1897,  116  Ala.  1 ;   22  So.  580,  585;   67 
Am.  St.  Rep.  95;    Tanner  v.  Lee,  1904,  121  Ga.  524;    49  S.  E.  592; 
Merchants'  Loan,  etc.,  Co.  v.  Lamson,  1899,  90  111.  App.  18 ;   Spaulding 
t;.  Kendriek,  1898,  172  Mass.  71 ;    51  N.  E.  453 ;    Walker  v.  Conant, 
1888,  69  Mich.  321 ;    37  N.  W.  292 ;    13  Am.  St.  Rep.  391 ;    Case  v. 
Hammond  Packing  Co.,   1904,   105  Mo.  App.   168;    79  S.  W.  732; 
Justh  v.  Nat.  Bank,  1874,  56  N.  Y.  478 ;    Stephens  v.  Board  of  Educa- 
tion 1879,  79  N.  Y.  183 ;   35  Am.  Rep.  511 ;  Newhall  ».  Wyatt,  1893, 
139  N.  Y.  452 ;  34  N.  E.  1045 ;  36  Am.  St.  Rep.  712  ;  Bank  of  Charles- 
ton &  Bank  of  State,  1866,  13  Rich.  L.  (S.  C.)  291.     Contra:    Por- 
ter v.  Roseman,  1905,  165  Ind.  255  ;  74  N.  E.  1105  ;   112  Am.  St.  Rep. 
222. 

3  Mason  v.  Waite,  1822,  17  Mass.  560,  563. 

4  See  Barrelett  v.  Bellgard,  1874,  71  111.  280 ;    Stockett  v.  Watkins! 
Admrs.,  1830,  2  Gill  &  J.  (Md.)  326,  343;   20  Am.  Dec.  438;   Sparks 
v.  Purdy,  1847,  11  Mo.  219;    Cernahan  v.  Chrisler,  1900,  107  Wis. 
645,  83  N.  W.  778. 

451 


§  281]  RESTITUTION   AS   ALTERNATIVE   REMEDY         [Part  IV 

hiring  and  hold  the  converter  in  assumpsit.1  But  in  jurisdic- 
tions where  the  use  of  assumpsit  against  a  tort-feasor  is  limited 
to  cases  in  which  money  has  been  received  by  him,  it  cannot 
be  used  against  a  converter  who  has  returned  the  goods,  unless 
during  his  wrongful  possession  he  hired  the  goods  to  others  and 
received  compensation  for  their  use.2 

§  281.  (2)  Deceit.  —  It  has  been  pointed  out  that  obtaining 
goods  by  fraud  constitutes  conversion,  and  that  consequently 
the  victim  of  the  fraud  has  the  same  right  to  elect  assumpsit 
as  in  other  cases  of  conversion  (ante,  §  278).  Even  where  a 
fraud  does  not  amount  to  conversion,  however,  —  as  in  the  case 
of  inducing  the  payment  of  money  not  justly  due,  —  the  same 
rule  obtains.3  In  the  case  just  referred  to,  as  in  the  case  of  the 
conversion  of  specific  money,  it  is  obvious  that  the  count  to  be 
used  is  that  for  money  had  and  received  to  the  plaintiff's  use. 
If  the  deceit  consists  in  inducing  one  to  render  services  to 
the  wrongdoer,  the  count  for  work  and  labor  should  of  course  be 
employed. 

1  Janes  v.  Buzzard,  1834,  Hemp.   (U.  S.  Superior  Ct.  Ark.)  240; 
Fed.  Gas.,  No.  7206  a;    Fanson  v.  Linsley,  1878,  20  Kan.  235,  (use 
of  threshing  machine) ;    Stockett  v.  Watkins'  Admrs.,   1830,  2  Gill 
&  J.  (Md.)  326;    20  Am.  Dec.   438,    (slaves).     And   see   Hambly  v. 
Trott,  1877,  Cowp.  371,  377 ;   McSorley  v.  Faulkner,  1892,  18  N.  Y. 
Supp.  460.     Contra:  Wynne  v.  Latham,  1859,  6  Jones  L.  (51  N.  C.) 
329. 

2  Crow  v.  Boyd's  Admrs.,  1849,  17  Ala.  51,  (slaves). 

3  Burton  v.  Driggs,  1873,  20  Wall.  (U.  S.)  125 ;   Dashaway  Assn.  v. 
Rogers,  1889,  79  Cal.  211;    21  Pac.  742;    Minor  v.  Baldridge,  1898, 
123  Cal.  187 ;    55  Pac.  783 ;    Donovan  v.  Purtell,  1905,  216  111.  629 ; 
75  N.  E.  334;    1  L.  R.  A.  (N.  S.)  176;    Warner  v.  Cammack,  1873, 
37  la.  642 ;   Jones  v.  Inness,  1884,  32  Kan.  177 ;   4  Pac.  95 ;   Johnson 
v.  Seymour,  1890,  79  Mich.  156 ;    44  N.  W.  344 ;    Byard  v.  Holmes, 
1868,  33  N.  J.  L.  119 ;  Cory  v.  Freeholders  of  Somerset,  1885,  47  N.  J.  L. 
181 ;   Sarasohn  v.  Miles,  1900,  52  App.  Div.  628 ;   65  N.  Y.  Supp.  108, 
aff.  1901,  169  N.  Y.  573;    61  N.  E.  1134;    Stroud  ».  Life   Ins.  Co., 
1908,  148  N.  C.  54;   61  S.  E.  626;   Brundred  v.  Rice,  1892,  49  Oh.  St. 
640 ;   32  N.  E.  169 ;   34  Am.  St.  Rep.  589 ;    Williams  v.  Smith,  1909, 
29  R.  I.  562 ;   72  Atl.  1093 ;   Mathers  v.  Pearson,  1825,  13  Serg.  &  R. 
(Pa.)  258;   Humbird  v.  Davis,   1904,  210  Pa.  St.  311;  59  Atl.  1082; 
James  v.  Hodsden,   1874,  47  Vt.  127 ;   Johnson  v.  Cate,  1905,  77  Vt. 
218 ;  56  Atl.  830 ;  Western  Assurance  Co.  v.  Towle,  1886,  65  Wis.  247 ; 
26  N.  W.  104. 

452 


Chap.  XX]  DECEIT  [§  282 

§  282.  Same  :  Inducing  void  marriage  by  false  representations. 
—  Fraudulently  to  induce  one  to  enter  into  a  void  marriage  is 
conceded  to  be  an  actionable  wrong.1  And  it  has  been  held  that 
the  person  aggrieved  may  "  waive  the  tort  "  and  sue  in  assump- 
sit  for  the  value  of  services  rendered  the  wrongdoer  as  a  result 
of  the  fraud: 

Higgins  v.  Breen,  Admr.  of  McNally,  1845, 9  Mo.  497 :  Assump- 
sit  for  work  and  labor.  McNally,  representing  himself  to  be 
a  widower,  induced  the  plaintiff  to  marry  him-  She  lived  with 
him  until  his  death,  when  she  discovered  that  he  had  a  former 
wife  living,  and  that  her  marriage  to  him  was  void.  SCOTT,  J. 
(p.  501) :  "If  the  injury  of  McNally  was  a  mere  tort  which 
resulted  in  no  benefit  to  himself,  .  .  .  the  action  would  not 
survive ;  but  if  it  can  be  shown  that  the  injury  resulted  in  ad- 
vantage to  him,  that  he  was  made  richer,  or  his  circumstances 
improved  by  the  work  and  labor  of  the  unfortunate  plaintiff, 
then  this  action  will  lie.  It  is  not  maintained  that  for  the 
deceit  practiced,  for  the  injury  to  her  person,  the  plaintiff  has 
any  redress  against  the  administrator,  .  .  .  she  is  only  allowed 
the  value  of  her  work  and  labor  which  were  performed  under  such 
circumstances,  as  the  law  will  imply  a  promise  to  pay  for  them."  2 

But  there  are  also  cases  in  which  restitution  is  denied : 

Cooper  v.  Cooper,  1888,  147  Mass.  370;  17  N.  E.  892;  9  Am. 
St.  Rep.  721 :  Assumpsit.  Facts  similar  to  those  in  Higgins  v. 
Breen,  supra.  ALLEN,  J.  (p.  373) :  "The  work  and  labor 
never  constituted  a  cause  of  action  in  tort.  The  plaintiff  could 
have  maintained  no  action  of  tort  against  the  intestate  for  with- 
holding payment  for  the  work  and  labor  in  housekeeping,  or 
for  by  false  representations  inducing  her  to  perform  the  work 
without  pay.  The  particular  acts  which  she  performed  as  a 
wife  were  not  induced  by  the  deceit,  so  that  each  would  con- 
stitute a  substantive  cause  of  action,  but  by  the  position  which 
she  was  deceived  into  assuming,  and  would  be  elements  of  damage 
in  an  action  for  that  deceit.  Labor  in  housekeeping  was  a 

1  Morrill  v.  Palmer,  1895,  68  Vt.  1 ;  33  Atl.  829 ;  33  L.  R.  A.  411. 

2  Accord:  Fox  v.  Dawson,  1820,  8  Mart.  (O.  S.)  (La.)  94.     And  see 
Mixer  v.  Mixer,  1905,  2  Cal.  App.  227  ;  83  Pac.  273. 

453 


§  282]  RESTITUTION   AS   ALTERNATIVE   REMEDY         [Part  IV 

small  incident  to  a  great  wrong,  and  the  intestate  owed  no  duty, 
and  had  no  right  to  single  that  out  and  offer  payment  for  it 
alone ;  and  the  offer  to  do  so  might  as  well  have  been  deemed  an 
aggravation  of  the  injury  to  the  plaintiff."  l 

Payne's  Appeal,  1895,  65  Conn.  397 ;  32  Atl.  948 ;  33  L.  R.  A. 
418;  48  Am.  St.  Rep.  215;  Claim  of  Ferguson  against  the 
estate  of  Lizzie  Seymour,  deceased,  for  board,  lodging,  and  other 
necessaries  furnished  said  Lizzie  Seymour,  whom  claimant  had 
been  induced  to  marry  by  false  representations  that  she  was  a 
single  woman.  HAMERSLEY,  J.  (p.  409):  "The  principle  the 
plaintiff  invokes  does  not  apply  to  his  case ;  because,  during 
the  life  of  the  intestate  he  had  no  cause  of  action  against  her, 
except  for  damage  resulting  from  a  private  wrong;  the  in- 
jury he  suffered  was  a  personal  injury,  and  if  a  consequential 
damage  to  his  personal  estate  followed  the  injury,  it  was  so 
dependent  upon  and  inseparable  from  the  personal  injury  which 
is  the  primary  cause  of  action,  that  there  is  no  right  to 
maintain  a  separate  action  in  respect  of  such  consequential 
damage." 

The  reasons  for  denying  relief,  given  in  these  cases,  are  not 
convincing.  The  chief  arguments  seem  to  be :  (1)  that  the  tort 
of  inducing  one  to  enter  into  a  void  marriage  is  essentially  a 
personal  injury  to  which  the  benefit  obtained  by  the  wrongdoer  is 
merely  incidental ;  and  (2)  that  the  value  of  the  benefit  obtained 
by  the  defendant  is  only  a  single  item  of  consequential  damages 
which  cannot  be  separated  from  the  wrong  itself  and  made  the 
sole  basis  of  an  action  by  the  person  wronged.  In  answer  to  the 
first,  it  is  submitted  that  if  a  wrongdoer  is  benefited  at  his  vic- 
tim's expense  to  any  extent  whatever,  the  relative  insignificance 
of  such  benefit,  as  compared  with  the  injury  suffered  by  his  vic- 
tim, affords  no  reason  for  denying  to  the  latter  the  right  to  elect 
an  action  for  restitution  instead  of  an  action  for  damages.  As  to 

1  See  Graham  v.  Stanton,  1901,  177  Mass.  321 ;  58  N.  E.  1023, 
where,  upon  the  authority  of  Cooper  v.  Cooper,  supra,  it  is  said  that 
if  one  takes  a  child  into  his  household  and  falsely  represents  to  her 
that  he  has  legally  adopted  her,  and  thereby  induces  her  to  render 
services  in  household  work,  the  child's  only  remedy  is  in  tort  for  the 
deceit. 

454 


Chap.  XX]  TRESPASS  ON  LAND  [§284 

the  second,  it  may  be  pointed  out  that  the  plaintiff,  in  electing 
to  sue  for  restitution,  does  not  separate  the  consequential  bene- 
fit to  the  defendant  from  the  wrong  committed  by  him.  The 
very  foundation  of  the  action  for  restitution  is  the  fraud  of  the 
defendant  in  inducing  the  plaintiff  to  enter  into  the  void  mar- 
riage ;  and  the  only  essential  difference  between  the  action  in 
assumpsit  and  that  of  deceit,  in  such  a  case,  is  that  in  the  former 
the  plaintiff  seeks  to  recover  the  value  of  the  benefit  resulting 
to  the  defendant,  while  in  the  latter  he  demands  compensation 
for  the  damages  resulting  to  himself.1 

Even  were  there  no  fraudulent  representation  in  these  cases, 
it  is  submitted  that  restitution  should  be  enforced  upon  the 
ground  that  the  benefit  conferred  upon  the  defendant  is  con- 
ferred in  reliance  upon  a  supposed  legal  duty  which  turns  out 
to  be  non-existent.  But  this  topic  is  treated  in  another  chapter 
(ante,  §  184). 

§  283.  (3)  Trespass  on  land.  —  Ordinarily  a  mere  trespasser 
on  land  derives  no  benefit  from  his  wrongful  act  and  therefore 
may  not  be  sued  in  assumpsit.  If,  however,  he  severs  and  re- 
moves timber,  stone,  minerals,  soil,  or  any  products  of  the  soil, 
he  may  be  required  to  make  restitution  in  value.2  And  since 
the  trespass  on  the  land  and  the  conversion  of  the  thing  severed 
from  the  land  probably  constitute  but  a  single  cause  of  action, 
the  election  to  sue  in  assumpsit  precludes  any  action  for  damages.3 

§  284.  Same  :  Use  and  occupation.  —  It  is  evident  that  one 
who  wrongfully  takes  possession  of  and  occupies  another's  land 

1  For  a  more  extended  criticism  of  Cooper  v.  Cooper,  supra,  see 
Keener,  "Quasi-Contracts,"  pp.  323-326. 

2  Powell  v.  Rees,  1837,  7  Adol.  &  El.  426,  (coal) ;   Phelps  v.  Church 
of  Our  Lady,  1900,  99  Fed.  683 ;    40  C.  C.  A.  72,  (stone) ;    Asher  v. 
Cornett,  1908,  (Ky.)  113  S.  W.  131,   (timber) ;   Welch  v.  Bagg,  1863, 
12  Mich.  41,  (pasturing  cows :  but  see  St.  John  v.  Antrim  Iron  Co., 
1899,  122  Mich.  68 ;  80  N.  W.  998) ;  Norden  v.  Jones,  1873,  33  Wis. 
600 ;   14  Am.  Rep.  782.     See  Stearns  v.  Dillingham,  1850,  22  Vt.  624 ; 
54  Am.  Dec.  88,  (must  be  turned  into  money).     But  see  Bigelow  v. 
Jones,  1830,  10  Pick.  (Mass.)  161 ;    Parks  v.  Morris,  Layfield  &  Co., 
1907,  63  W.  Va.  51 ;   59  S.  E.  753,  (assumpsit  will  not  lie  when  title 
to  land  involved).  / 

3  Roberts  v.  Moss,  1907,  127  Ky.  657 ;  32  Ky.  Law  Rep.  525 ;   106 
S.  W.  297 ;  17  L.  R.  A.  (N.  S.)  280. 

455 


§  284]  RESTITUTION   AS   ALTERNATIVE   REMEDY         [Part  IV 

is  unjustly  benefited  to  the  extent  of  the  value  of  its  use.  Where 
possession  is  taken  under  claim  of  right  and  a  question  of  title 
is  thereby  raised,  assumpsit  may  be  thought  an  unsuitable 
remedy.1  But  where  the  entry  is  conceded  to  be  wrongful, 
assumpsit  for  use  and  occupation  would  seem  to  be  appropriate. 
For  a  reason  of  an  historical  nature,  however,  it  is  unavailable.2 
Apparently  because  the  action  of  debt  for  rent  reserved  survived 
the  tenant,  and  moreover  could  not  be  defeated  by  wager  of  law, 
the  courts  thought  it  unnecessary  to  recognize  indebitatus  as- 
sumpsit as  a  proper  remedy  for  the  collection  of  rent.  And 
though  by  special  act  of  Parliament3  indebitatus  assumpsit 
was  finally  allowed  against  a  tenant  upon  a  parol  demise,  the 
courts  have  restricted  its  use  to  the  cases  of  genuine  tenancy 
contemplated  by  the  statute.4  They  have  held,  furthermore, 
that  since  the  trespasser  cannot  be  held  in  assumpsit  for  the 
use  and  occupation  of  the  land,  the  income  that  he  may  derive 

1  See  Lindon  v.  Hooper,  1776,  Cowp.  414 ;  Phelps  v.  Church  of  Our 
Lady,  1900,  99  Fed.  683 ;  40  C.  C.  A.  72 ;  Downs  v.  Finnegan,  1894, 
58  Minn.  112 ;  59  N.  W.  981 ;  49  Am.  St.  Rep.  488 ;  Parks  v.  Morris, 
Layfield  &  Co.,  1907,  63  W.  Va.  51 ;  59  S.  E.  753.  But  see  Illinois, 
etc.,  R.  Co.  v.  Ross,  1904,  26  Ky.  Law  Rep.  1251 ;  83  S.  W.  635,  638. 

1  See  Ames,  "Assumpsit  for  Use  and  Occupation,"  2  Harv.  Law 
Rev.  377. 

3  Statutes  11  Geo.  II.  c.  19,  sec.  14. 

4  Tew.  v.  Jones,  1844,  13  Mees.  &  W.  12 ;  Adsit  v.  Kaufman,  1903, 
121  Fed.  355 ;  58  C.  C.  A.  33  ;  Stringfellow  v.  Curry,  1884,  76  Ala.  394 ; 
Stockett  v.  Watkin's  Admrs.,  1830,  2  Gill  &  J.  (Md.)  326 ;  20  Am.  Dec. 
438;    Central  Mills  Co.  v.  Hart,  1878,  124  Mass.  123;    Lockwood  v. 
Thunder,  etc.,  Boom  Co.,  1880,  42  Mich.  536 ;  4  N.  W.  292 ;  Hender- 
son  v.  Detroit,  1886,  61   Mich.  378 ;   28  N.  W.  133 ;    Hurley  v.   La- 
moreaux,  1882,  29  Minn.  138 ;  12  N.  W.  447 ;  McLane  v.  Kelly,  1898, 
72  Minn.  395 ;    75  N.  W.  601 ;   Aull  Savings  Bank  v.  Aull,  1883,  80 
Mo.  199;  Janouch  v.  Pence,  1903,  3  Neb.  (Unof.)  867;  93  N.  W.  217; 
Dixon  v.  Ahern,  1887,  19  Nev.  422 ;    14  Pac.  598 ;    Smith  v.  Stewart, 
1810,  6  Johns.  (N.  Y.)  46 ;   5  Am.  Dec.  186 ;   Preston  v.  Hawley,  1886, 
101  N.  Y.  586;   5  N.  E.  770;  Ackerman  v.  Lyman,  1866,  20  Wis.  454. 
See  Woodbury  v.  Woodbury,  1866,  47  N.  H.  11,  21-22;  90  Am.  Dec. 
555 ;  Baldwin  v.  Bohl,  1909,  23  S.  D.  395 ;   122  N.  W.  247.     But  see 
Mayor,  etc.,  of  Newport  v.  Saunders,  1832,  3  Barn.  &  Ad.  411 ;  Illinois, 
etc.,  R.  Co.  v.  Ross.  1904,  26  Ky.  Law  Rep.  1251 ;  83  S.  W.  635,  638 ; 
National  Oil  Refining  Co.  v.  Bush.  1879,  88  Pa.  St.  335.     For  a  criticism 
of  the  rule,  see  "Action  of  Use  and  Occupation  against  a  Trespasser,'' 
Eugene  McQuillan,  23  Cent.  Law  Journal  387. 

456 


Chap.  XX]       ABDUCTION   OF   CHILD    OR    SERVANT  [§  285 

from  letting  the  land  is  not  recoverable  in  the  count  for  money 
had  and  received.1 

It  is  interesting  to  note,  in  this  connection,  that  the  measure 
of  recovery  in  the  tort  action  for  mesne  profits  is  not  the  damages 
suffered  by  the  plaintiff,  but  the  reasonable  value  of  the  use  and 
occupation  of  the  land,2  —  precisely  the  same  rule  as  would  be 
enforced  in  an  action  in  indebitatus  assumpsit. 

Even  if  the  trespass  consists  merely  of  a  wrongful  but  not 
exclusive  use  of  land  —  for  instance,  the  occasional  use  of  one's 
building  for  the  storage  of  the  trespasser's  goods,  or  of  one's 
private  roadway  for  their  transportation,  —  the  wrongdoer,  it 
would  appear,  is  enriched  to  the  extent  of  the  value  of  such  use. 
But  here,  again,  indebitatus  assumpsit  will  not  lie.  Moreover, 
in  a  case  of  this  sort  in  which  it  appeared  that  a  trespasser  had 
used  an  underground  roadway  for  the  carriage  of  coal,  relief  in 
equity  was  denied  on  the  ground  that  the  trespasser  "  saved  his 
estate  expense,  but  he  did  not  bring  into  it  any  additional  prop- 
erty or  value  belonging  to  another  person."  3  This  decision  is 
criticized  in  another  section  (ante,  §  275). 

§  285.  (4)  Abduction  of  child  or  servant :  Inducing  breach  of 
contract.  —  Where,  either  by  force  or  by  enticement,  a  minor 
child  is  taken  from  his  parent,  or  an  apprentice  from  his  master, 
and  compelled  or  induced  to  work  for  the  benefit  of  his  abductor, 
the  parent  or  master  may  elect  to  sue  in  tort  for  damages  or  in 
assumpsit  for  the  value  of  the  services  rendered.4  In  a  leading 
case,  Lightly  v.  Clouston?  Chief  Justice  MANSFIELD  said : 

1  Clarance  v.  Marshall,  1834,  2  Cromp.  &  Mees.  495 ;    Lockard  v. 
Barton,  1884,  78  Ala.  189 ;   King  ».  Mason,  1866,  42  111.  223 ;   89  Am. 
Dee.  426. 

2  See  Cutter  ».  Waddingham,  1862,  33  Mo.  269  ;  Wallace  v.  Berdell, 
1885,  101  N.  Y.  13 ;  3  N.  E.  769 ;  Morrison  v.  Robinson,  1858,  31  Pa. 
St.  456. 

3  Phillips  v.  Homfray,  1883,  24  Ch.  Div.  439,  462. 

4  Lightly  v.  Clouston,   1808,   1   Taunt.   112,    (apprentice);    Foster 
v.  Stewart,  1814,  3  Maul.  &  Sel.  191,  (apprentice)  ;  Culberson  v.  Ala- 
bama Const.  Co.,  1907,  127  Ga.  599;  56  S.  E.  765;  9  L.  R.  A.  (N.  S.) 
411,  (minor  son) ;  Thompson  v.  Howard,  1875,  31  Mich.  309,  (minor 
son).      And  see  James  v.  Le  Roy,  1810,  6  Johns.  (N.  Y.)  274,  (ap- 
prentice). B 1808,  1  Taunt.  112,  114. 

457 


§  286]  RESTITUTION   AS   ALTERNATIVE   REMEDY         [Part  IV 

"In  the  present  case  the  Defendant  wrongfully  acquires  the 
labor  of  the  apprentice ;  and  the  master  may  bring  his  action 
for  the  seduction.  But  he  may  also  waive  his  right  to  recover 
damages  for  the  tort,  and  may  say  that  he  is  entitled  to  the  labor 
of  his  apprentice,  that  he  is  consequently  entitled  to  an  equiv- 
alent for  that  labor,  which  has  been  bestowed  in  the  service 
of  the  Defendant.  .  .  .  This  case  approaches  as  nearly  as 
possible  to  the  case  where  goods  are  sold  and  the  money  has 
found  its  way  into  the  pocket  of  the  Defendant." 

There  appears  to  be  no  reason  for  distinguishing  from  the 
case  of  the  abduction  of  a  child  or  apprentice  the  case  of  the 
taking  by  force  of  an  ordinary  contract  servant.  Since  the  serv- 
ant has  not  voluntarily  quit  his  master's  employ,  the  master, 
as  between  himself  and  the  abductor,  continues  to  be  entitled 
to  his  services  and  consequently  to  the  value  of  the  benefit 
derived  therefrom  by  the  abductor.  But  inducing  a  contract 
servant  to  break  his  contract  is  an  essentially  different  case. 
There  is  a  tort,  to  be  sure,  but  from  the  moment  the  contract 
is  broken  the  master  is  not  entitled  to  the  labor  of  the  servant 
as  against  another  employer,  even  though  such  employer  be  the 
person  who  committed  the  tort.  It  seems,  therefore,  that  in 
this  case  the  action  for  damages  is  the  only  remedy. 

§  286.  (5)  False  imprisonment :  Service  under  compulsion.  — 
If  one  who  is  guilty  of  the  tort  of  false  imprisonment  is  benefited 
by  the  labor  which  his  victim  is  compelled  to  perform,  he  may,  at 
the  option  of  the  plaintiff,  be  held  responsible  in  assumpsit  for 
work  and  labor  for  the  reasonable  value  of  the  services  rendered.1 
This  rule  has  been  applied  to  one  who  compelled  a  free  negro  to 
work  as  a  slave,2  and  to  a  prison-labor  contractor ; 3  and  in  one 
case  in  which  the  plaintiff  had  been  wrongfully  held  as  a  lunatic 
and  "  let  out "  for  profit  by  the  overseers  of  the  poor,  he  was 

1  Patterson  ».  Prior,  1862,  18  Ind.  440 ;  81  Am.  Dec.  367 ;  Abbot  ». 
Town  of  Fremont,  1887,  34  N.  H.  432;   Negro  Peter  v.  Steel,  1801,  3 
Yeates  (Pa.)  250. 

2  Negro  Peter  v.  Steel,  1801,  3  Yeates  (Pa.)  250. 

3  Patterson  v.  Prior,  1862,  18  Ind.  440 ;  81  Am.  Dec.  367.     But  see, 
contra,  Sloss  Iron  Co.  v.  Harvey,  1898,  116  Ala.  656 ;  22  So.  994. 

458 


Chap.  XX]  USURPATION  OF  OFFICE  [§  287 

permitted  to  recover  from  the  township,  in  an  action  for  money 
had  and  received,  the  sum  paid  for  his  services.1 

If  the  defendant,  though  guilty  of  the  tort  of  false  imprison- 
ment, in  good  faith  has  paid  a  third  party  for  the  services  of  the 
plaintiff,  he  should  be  liable  in  assumpsit  only  to  the  extent 
that  the  value  of  the  services  received  by  him  exceeded  the 
sum  paid  therefor.2 

§  287.  (6)  Usurpation  of  office.  —  The  salary  or  fees  appur- 
tenant to  a  public  office  are  said  to  follow  the  title  to  the  office. 
The  de  jure  officer,  therefore,  is  entitled  to  such  salary  or  fees 
as  against  an  officer  de  facto,  even  though  the  latter  holds  under 
an  honest  claim  of  right  and  faithfully  performs  the  duties  of 
the  office.3  On  grounds  of  public  policy,  however,  the  payment 
in  good  faith  of  such  salary  or  fees  to  the  de  facto  officer  while 
still  in  office,  discharges  the  corporation  from  liability  to  the 
de  jure  officer.4  In  that  case,  the  de  jure  officer's  only  recourse 
is  against  the  officer  de  facto,  from  whom  he  may  recover,  in  an 
action  for  money  had  and  received,  the  full  amount  of  the  fees 
or  salary  received  by  him,6  without  deducting  the  value  of  the 

1  Abbot  v.  Town  of  Fremont,  1887,  34  N.  H.  432. 

2  See  Thompson  v.  Bronk,  1901,  126  Mich.  455 ;    85  N.  W.  1084. 
In  this  case  the  fact  that  the  defendant  had  paid  the  price  agreed 
upon  in  his  contract  with  the  prison  warden  was  regarded  by  the  court 
as  discharging  him  from  liability  to  the  plaintiff. 

3  Mayfield  v.  Moore,  1870,  53  111.  428 ;   5  Am.  Rep.  52 ;   McCue  v. 
Wapello  County,  1881,  56  la.  698;   10  N.  W.  248;   41  Am.  Rep.  134; 
Dolan  v.  Mayor  of  N.  Y.,  1877,  68  N.  Y.  274 ;    23  Am.  Rep.  168 ; 
Commonwealth   v.  Slifer,   1855,  25    Pa.  St.  23;    64  Am.   Dec.  680. 
See  Mechem,  "  Public  Officers,"  §  331,  and  other  cases  there  cited. 
Contra:  Erwin  ».  Jersey  City,  1897,  60  N.  J.  L.  141 ;   37  Atl.  732;   64 
Am.  St.  Rep.  584. 

*  Board  of  Commrs.  ».  Rhode,  1907,  41  Colo.  258 ;  95  Pac.  551 ;  16 
L.  R.  A.  (N.  S.)  794 ;  124  Am.  St.  Rep.  134 ;  Commrs.  t>.  Anderson,  1878. 
20  Kan.  298 ;  27  Am.  Rep.  171 ;  Auditors  v.  Benoit,  1870,  20  Mich, 
176 ;  4  Am.  Rep.  382 ;  Dolan  v.  Mayor  of  N.  Y.,  1877,  68  N.  Y.  274 ; 

23  Am.  Rep.  168 ;    Stearns  v.  Sims,  1909,  24  Old.  623 ;    104  Pac.  44 ; 

24  L.  R.  A.  (N.  S.)  475.    See  Mechem,  "  Public  Officers,':  §  332,  and 
other  cases  there  cited;    29   Cyc.  1430,  n.  99.      Contra:   People  v. 
Smyth,  1865,  28  Cal.  21. 

5  Arris  v.  Stukely,  1676,  2  Mod.  260 ;  Mayfield  v.  Moore,  1870,  53 
111.  428  ;  5  Am.  Rep.  52 ;  Rule  v.  Tait,  1888,  38  Kan.  765 ;  18  Pac.  160 ; 
People  v.  Miller,  1872,  24  Mich.  458 ;  9  Am.  Rep.  131 ;  Sandoval  v. 

459 


§  288]  RESTITUTION    AS   ALTERNATIVE   REMEDY         [Part  IV 

services  rendered  by  such  de  facto  officer  to  the  municipality  or 
any  sum  which  the  de  jure  officer  has  or  might  have  earned  in 
other  employment  during  the  period  of  his  wrongful  exclusion 
from  office.1  Where  the  de  facto  officer  performs  the  duties  of 
the  office  in  the  honest  belief  that  he  is  legally  entitled  thereto, 
there  would  appear  to  be  no  injustice  in  permitting  him  to  retain 
the  reasonable  value  of  the  services  actually  rendered  by  him. 
But  it  is  declared  that  "  On  the  -basis  of  a  sound  public  policy, 
the  principle  commends  itself,  for  the  reason  that  one  would  be 
less  liable  to  usurp  or  wrongfully  retain  a  public  office,  and 
defeat  the  will  of  the  people  or  the  appointing  power,  if  no 
benefit,  but  a  loss  would  result  from  such  wrongful  retention 
or  usurpation  of  an  office."  2 

It  should  be  added,  perhaps,  that  the  fees  received  by  a  de 
facto  officer  which  are  not  payable  by  law  and  are  consequently 
in  the  nature  of  gratuities,  are  not  recoverable  from  him  by  the 
dejure  officer.3  This  on  the  obvious  ground  that  the  defendant's 
enrichment  is  not  at  the  plaintiff's  expense,  since  the  plaintiff, 
if  in  office,  would  not  have  been  entitled  to,  and  perhaps  would 
not  have  received,  the  fees  in  question. 

§  288.  (7)  Infringement  of  patent  rights.  —  The  usual  and 
frequently  the  only  adequate  remedy,  in  case  of  the  invasion  of 
the  exclusive  rights  secured  by  letters  patent,  is  a  suit  in  equity 
for  an  injunction  and  an  accounting  of  profits.4  Where  the 

Albright,  1908, 14  N.  M.  345  ;  93  Pac.  717,  aff.  1910,  216  U.  S.  331 ;  30  S. 
Ct.  318 ;  Nichols  v.  MacLean,  1886,  101  N.  Y.  526 ;  5  N.  E.  347 ;  54  Am. 
Rep.  730';  Hudgens  v.  Kennedy,  1850,  5  Strob.  (S.  C.)  44.  See  Mechem, 
"  Public  Officers,"  §  333,  and  other  cases  there  cited ;  29  Cyc.  1394,  n. 
74.  Contra:  Stuhr  v.  Outran,  1882,  44  N.  J.  L.  181 ;  43  Am.  Rep.  353. 

1  United  States  v.  Addison,  1867,  6  Wall.   (U.  S.)  291.     And  see 
Fitzsimmons  v.  City  of  Brooklyn,  1886,  102  N.  Y.  536;  7  N.  E.  787 ; 
55  Am.  Rep.  835.     But  necessary  expenses  of  maintaining  office  may 
be  deducted:    Sandoval  v.  Albright,  1908,  14  N.  M.  345;    93  Pac. 
717,  aff .  1910,  216  U.  S.  331 ;   30  S.  Ct.  318 ;   Kreitz  v.  Behrensmeyer, 
1894, 149  111.  496;  36  N.  E.  983;  24  L.  R.  A.  59;  Mayfield  v.  Moore, 
1870,  53  111.  428 ;   5  Am.  Rep.  52. 

2  Kreitz  t>.  Behrensmeyer,  1894,  149  111.  496,  503 ;   36  N.  E.  983 ; 
24  L.  R.  A.  59. 

3  Boyter  v.  Dodsworth,  1796,  6  Term  R.  681. 

4  U.  S.  R.  S.  §  4921. 

460 


Chap.  XX]       LIABILITY   OF   JOINT   TORT-FEASORS  [§  289 

patent  has  expired,  however,  relief  in  equity  is  ordinarily  not 
obtainable ;  and  in  any  event  the  patentee  may  sue  the  infringer 
at  law  as  a  tort-feasor  and  recover  compensatory  damages.1 
Since  the  tort  is  one  which  benefits  the  wrongdoer,  it  has  been 
supposed  that  the  patentee  may  elect  to  sue  in  assumpsit  for 
restitution.2  But  the  rights  and  remedies  of  a  patentee  are 
created  and  defined  by  Congress,  and  the  only  action  at  law 
provided  for  by  the  statute  is  an  action  on  the  case  for  damages.3 
Whether  this  includes  an  action  in  assumpsit  for  restitution 
may  be  doubted.4  It  may  be  noted,  however,  that  if  an  action 
for  restitution  is  allowable,  the  true  measure  of  recovery  is  not 
the  profits  actually  reaped  by  the  infringer,  as  in  the  case  of  a 
suit  in  equity  for  an  injunction  and  accounting,  but  the  value  of 
the  use  of  the  invention  —  ordinarily  determined  by  reference 
to  the  royalty  or  price  paid  for  such  use  by  licensees.  For  it 
is  only  to  the  extent  of  the  value  of  the  use  that  the  infringer  is 
benefited  at  the  patentee's  expense. 

§  289.  (Ill)  The  liability  of  joint  tort-feasora.  —  In  England, 
the  liability  of  joint  tort-feasors  is  joint ; 5  in  America,  joint  and 
several.6  In  either  view,  of  course,  no  attention  is  paid,  in 
assessing  damages,  to  the  actual  division  of  the  spoils.  But 
what  if  the  injured  party  elects  to  sue  in  assumpsit  for  restitution 

1  U.  S.  R.  S.  §  4919. 

2  See  Professor  A.  L.  Corbin,  "Waiver  of  Tort  and  Suit  in  Assump- 
sit," 19  Yale  Law  Jour.  221,  231.     Also  :  Schillinger  v.  United  States, 
1894,  155  U.  S.  163 ;   15  S.  Ct.  85 ;   Steam  Stone-Cutter  Co.  v.  Shel- 
dons,  1883,  15  Fed.  608,  (C.  C.  Vt.).     But  see,  contra,  B.  F.  Avery  & 
Sons  v.  MeClure,  1909,  94  Miss.  172 ;  47  So.  901 ;  22  L.  R.  A.  (N.  S.) 
256 

3'See  U.  S.  R.  S.  §  4919. 

4  In  May  v.  Logan,  1887,  30  Fed.  250,  259,  (C.  C.  Ohio),  JACKSON,  J., 
said  :  "If  Congress  had  not  directed  that  an  action  on  the  case  should 
be  the  remedy  for  the  recovery  of  damages  for  the  infringement  of 
a  patent,  the  patentee  could,  in  cases  like  the  present,  waive  what  is 
called  the  tortious  act  and  bring  assumpsit  upon  the  implied  contract 
against  the  county  to  recover  the  value  of  the  property  appropriated." 
But  see  Steam  Stone-Cutter  Co.  v.  Sheldons,  1883,  15  Fed.  608,  (C. 
C.  Vt.). 

B  Brinsmead  v.  Harrison,  1872,  L.  R.  7  C.  P.  547. 

6  Lovejoy  v.  Murray,  1865, 3  Wall.  (U.  S.)  1 ;  Elliott  v.  Hayden,  1870, 
104  Mass.  180 ;  McMannus  v.  Lee,  1869,  43  Mo.  206 ;  97  Am.  Dec.  386. 

461 


§  290]  RESTITUTION   AS   ALTERNATIVE   REMEDY         [Part  IV 

instead  of  in  trespass  for  damages  ?  Clearly,  he  is  not  entitled 
to  a  joint  judgment  if  one  of  the  wrongdoers  has  derived  no  bene- 
fit from  the  commission  of  the  tort ; l  nor  is  he  entitled  to  a 
joint  judgment,  if  each  has  received  a  benefit,  for  the  sum  of  the 
benefits  separately  received  by  them.2  The  obligation  to  make 
restitution  is  essentially  several,  each  tort-feasor  being  liable  to 
the  extent  of  the  benefit  received  by  him.  Even  if  the  proceeds 
of  the  tort  are  not  divided,  but  are  held  by  one  of  the  tort-feasors 
for  the  benefit  of  all,  or  by  a  common  agent,  it  would  seem  that 
each  should  be  answerable  only  to  the  extent  of  the  value  of  his 
interest  in  the  booty.  It  has  been  held  that  "  if  the  money 
was  received  by  a  common  agent,  those  for  whose  benefit  it  was 
thus  received  were  jointly  liable  for  the  whole  sum,"  3  but  since 
a  joint  judgment  is  enforceable  in  full  against  any  one  obligor, 
this  rule  would  permit  the  collection  of  the  entire  proceeds  of 
the  tort  from  one  who  has  only  a  fractional  interest  therein  — 
a  violation  of  the  fundamental  principle  which  underlies  the 
tort-feasor's  obligation  in  assumpsit. 

§  290.  (IV)  Rights  of  owners  in  common.  —  It  is  generally 
held  that  in  case  of  a  tort  against  common  owners  or  tenants  of 
property  they  must  sue  jointly,  whether  they  elect  to  seek  dam- 
ages or  restitution : 

Irwin's  Admr.  v.  Brown's  Extrs.,  1860, 35  Pa.  St.  331 :  Assump- 
sit to  recover  a  share  of  the  proceeds  of  a  wrongful  sale  of  timber 
belonging  to  the  plaintiff's  intestate  and  two  others  as  tenants 
in  common.  LOWBIE,  C.J.  (p.  332) :  "To  enforce  a  joint  or 
several  duty,  we  impute  a  joint  or  several  contract.  Now, 
whether  we  treat  the  defendant's  wrong  as  waste  or  trespass, 

1  Minor  v.  Baldridge,  1898,  123  Cal.  187 ;  55  Pac.  783,  784 ;  Patter- 
son v.  Prior,  1862,  18  Ind.  440;   81  Am.  Dec.  367;    Limited  Invest- 
ment Asso.  v.  Glendale  Investment  Asso.,  1898,  99  Wis.  54 ;   74  N.  W. 
633. 

2  But   see,  contra,  Gilmore  v.  Wilbur,  1831,  12  Pick.  (Mass.)  120; 
22  Am.  Dec.  410 ;  City  Nat.  Bank  v.  Nat.  Park  Bank,  1884,  32  Hun 
(N.  Y.  Sup.  Ct.)  105,  111. 

3Neate  v.  Harding,  1851,  6  Exch.  349;  National  Trust  Co.  v. 
Gleason,  1879,  77  N.  Y.  400,  404;  33  Am.  Rep.  632;  New  York 
Guaranty,  etc.,  Co.  v.  Gleason,  1879,  78  N.  Y.  503.  See  Brundred  v. 
Bice,  1892,  49  Ohio  St.  640;  32  N.  E.  169 ;  34  Am.  St.  Rep.  589. 

462 


Chap.  XX]  MEASURE   OF   RECOVERY  [§  292 

his  legal  liability  for  it  was  to  the  tenants  in  common  jointly ; 
and  if  the  tort  be  waived  and  a  constructive  contract  sub- 
stituted, it  must  be  a  joint  one.  One  cannot,  by  his  election 
of  a  substitute,  destroy  the  primary  action  to  which  his  co- 
tenants  were  entitled  with  him."  * 

There  is  authority,  however,  for  the  view  that  one  of  two  or 
more  tenants  in  common  may  sue  severally  in  assumpsit,2 
although  no  good  reason  for  the  distinction  is  apparent. 

§  291.  (V)  Infancy  or  insanity  as  a  defense  or  in  mitigation.  — 
It  is  hardly  necessary  to  point  out  that  the  infancy  or  insanity 
of  a  tort-feasor  is  no  defense  to  an  action  for  restitution.3  The 
form  of  action  is  contractual,  but  "  the  validity  of  a  plea  as  a 
defense  may,  and  ordinarily  should  turn,  not  upon  the  form  of 
the  action,  but  its  substantial  merit."  4  Moreover,  while  evi- 
dence of  immaturity  or  mental  deficiency  may  be  admitted 
under  some  circumstances  in  mitigation  of  damages,  it  is  quite 
irrelevant  when  the  plaintiff  is  seeking,  not  damages,  but  res- 
titution. 

§  292.  (VI)  Measure  of  recovery.  —  In  the  preceding  dis- 
cussion of  the  various  torts  in  which  there  is  an  election  to  sue 
for  restitution,  the  measure  of  recovery  has  from  time  to  time 
been  stated.  It  is  fundamental  that  the  plaintiff's  recovery 
must  be  limited  to  the  value  of  the  benefit  unjustly  enjoyed  by 
the  defendant  at  the  plaintiff's  expense.5  Consequently,  if 
there  are  circumstances  which  make  it  equitable  for  a  wrong- 
doer to  retain  part  of  the  proceeds  of  his  wrong,  only  the  balance 
may  be  recovered  from  him.  Such  was  thought  to  be  the  case 
in  the  Wisconsin  case  of  Western  Assurance  Co,  v.  Towle.6  The 

1  Also  :  Gilmore  v.  Wilbur,  1831,  12  Pick.  (Mass.)  120;  22  Am.  Dee. 
410 ;  White  v.  Brooks,  1861,  43  N.  H.  402. 

2  Tankersley  v.  Childers,  1853,  23  Ala.  781. 

3Bristow  v.  Eastman,  1794,  1  Esp.  172;  Elwell  v.  Martin,  1859, 
32  Vt.  217. 

4  Elwell  v.  Martin,  1859,  32  Vt.  217,  222. 

6Culberson  v.  Alabama  Const.  Co.,  1907,  127  Ga.  599;  56  S.  E. 
657,  767-9;  9  L.  R.  A.  (N.  S.)  411;  Western  Assurance  Co.  v. 
Towle,  1886,  65  Wis.  247,  258-61 ;  26  N.  W.  104 ;  Huganir  v.  Cotter, 
1899,  102  Wis.  323  ;  78  N.  W.  423  ;  72  Am.  St.  Rep.  884. 

6 1886,  65  Wis.  247,  257 ;  26  N.  W.  104. 

463 


§  292]  RESTITUTION   AS   ALTERNATIVE   REMEDY         [Part  IV 

defendants,  by  fraudulent  representations  as  to  the  extent  of 
a  loss,  which  fraudulent  representations,  under  the  terms  of 
the  policy,  worked  a  forfeiture  of  the  right  to  recover  anything 
upon  the  policy,  had  obtained  payment  as  for  a  total  loss.  The 
plaintiff  brought  this  action  to  recover  the  full  amount  paid, 
but  it  was  held  that  it  was  entitled  to  recover  only  the  amount 
paid  over  and  above  the  actual  loss.  Said  the  court : 

"The  action  for  money  had  and  received  is  in  some  sense  an 
equitable  action,  and  the  insurance  company  having  voluntarily 
paid  the  money  on  an  alleged  loss  claimed  by  the  defendants, 
they  can  only  recover  back  so  much  as  in  equity  and  good 
conscience  they  ought  not  to  have  paid.  .  .  .  False  swearing 
and  false  valuation  in  proof  of  loss  might  have  been  a  good 
defense  to  a  recovery  upon  the  policy  had  the  plaintiff  refused 
to  pay  the  loss ;  but  it  cannot  be  made  the  basis  of  a  right  to 
recover  back  money  already  paid  upon  the  policy.  The  plain- 
tiff's right  to  recover  depends  upon  proof  establishing  the  fact 
that  the  company  had  paid  more  money  than  covered  the  loss 
sustained  by  the  defendants,  and  that  such  payment  was  pro- 
cured by  the  false  and  fraudulent  acts  of  the  defendants." 

The  precise  amount  recoverable  may  depend  in  some  cases 
upon  the  form  of  assumpsit  used.  Thus,  if  A  wrongfully  seizes 
B's  goods  and  is  sued  in  assumpsit  for  goods  sold  and  delivered 
(as,  in  many  jurisdictions,  he  may  be),  the  measure  of  recovery 
is  the  value  of  the  goods  at  the  time  of  the  conversion.  But  if 
A,  after  seizing  the  goods,  sells  them,  and  is  sued,  not  for  goods 
sold  and  delivered,  but  for  money  had  and  received,  the  measure 
of  recovery  is  the  sum  realized  from  the  sale,  whether  such  sum 
exceeds  or  falls  short  of  the  value  of  the  goods  at  the  time  of  the 
original  conversion.  This,  presumably,  either  upon  the  theory 
that  the  owner  may  elect  to  regard  the  sale  of  his  goods,  rather 
than  the  original  taking,  as  the  conversion,  and  the  amount  of 
money  received  by  the  converter  as  conclusive  evidence  of  the 
value  of  that  which  has  been  taken  from  him,  or  upon  the  theory 
that  the  converter  holds  the  proceeds  of  the  sale  as  a  sort  of  con- 
structive trustee  for  the  owner.  So,  in  cases  of  services  ren- 

464 


Chap.  XX]        MEASURE  OF  RECOVERY  (§  293 

dered  under  compulsion,  the  wrongdoer  may  be  held,  in  as- 
sumpsit  for  work  and  labor,  for  the  value  of  the  services ;  but 
if  he  has  sold  the  services,  i.e.  compelled  the  plaintiff  to  work 
for  a  third  party,  and  is  sued  for  money  had  and  received,  the 
amount  received  by  the  wrongdoer  is  the  amount  recoverable 
from  him.1 

Since  the  obligation  is  to  make  restitution,  not  to  account, 
profits,  as  such,  are  not  recoverable.  Thus,  if  A  owns  a  vehicle 
for  the  carriage  of  passengers  which  he  lets  for  fifteen  dollars 
per  day,  and  B  wrongfully  takes  and  uses  the  vehicle  for  five 
days,  thereby  making  an  actual  profit  of  one  hundred  dollars, 
A  should  be  allowed  to  recover,  not  one  hundred  dollars,  the 
profit  realized  by  the  wrongdoer,  but  seventy-five  dollars,  the 
value  of  that  which  was  taken  from  the  party  injured.  How- 
ever, if  B,  instead  of  using  the  vehicle  himself,  lets  it  to  C  for 
five  days  at  twenty  dollars  per  day,  and  receives  from  C  the 
sum  of  one  hundred  dollars,  A  would  probably  be  allowed,  in  a 
count  for  money  had  and  received,  to  recover  the  amount  re- 
ceived by  B  from  C. 

§  293.  Same  :  Interest.  —  The  plaintiff  is  entitled  to  interest 
from  the  time  when  the  principal  sum  recovered  by  him  ought 
to  have  been  paid,  —  in  other  words  from  the  date  when  the 
cause  of  action  arose.  This  has  been  thought  to  mean  from  the 
time  of  an  election  to  sue  in  assumpsit.  Said  the  court  in 
Dougherty  v.  Chapman : 2 

"  By  electing  to  waive  the  tort,  the  plaintiff  becomes  entitled 
to  the  proceeds  of  the  sale,  but  up  to  that  time  he  was  not 
entitled  to  such  proceeds.  The  right  to  the  proceeds  accrued 
by  force,  and  at  the  moment  of  election,  and  not  before.  As 
the  plaintiff  was  not  entitled  to  the  proceeds  of  the  sale  until 
he  made  an  election,  as  a  matter  of  course  he  was  not  entitled 
to  interest  prior  thereto." 

Here  again  is  the  common  fallacy  that  the  obligation  to  make 
restitution  is  imposed  upon  the  defendant  by  the  act  of  the  plain- 

1  Abbot  v.  Town  of  Fremont,  1887,  34  N.  H.  432. 
2 1888,  29  Mo.  App.  233,  242. 

465 


§  294]  RESTITUTION   AS   ALTERNATIVE   REMEDY         [Part  IV 

tiff  in  electing  to  "  waive  the  tort."  In  the  true  view  of  the 
case,  the  obligation  arises,  not  from  an  act  of  the  plaintiff,  but 
by  operation  of  law  immediately  upon  receipt  of  the  benefit  by 
the  defendant,  and  interest  is  therefore  properly  recoverable 
from  the  date  of  such  receipt. 

Applying  the  rule  that  the  plaintiff  is  entitled  to  interest 
from  the  date  when  the  principal  sum  ought  to  have  been  paid, 
it  is  clear  that  when  the  judgment  is  for  money  received  by  the 
defendant,  either  from  the  plaintiff  or  from  a  third  party,  in- 
terest from  the  date  of  the  receipt  of  such  money  by  the  defend- 
ant should  be  added ; 1  that  when  the  judgment  is  for  the  value 
of  goods  wrongfully  taken  or  detained,  interest  should  run  from 
the  date  of  such  wrongful  taking  or  detention ;  that  when  the 
judgment  is  for  the  value  of  the  use  of  the  plaintiff's  goods  or  the 
value  of  the  compulsive  service  of  the  plaintiff  or  his  child 
or  apprentice,  interest  should  be  allowed  from  the  date  of  the 
termination  of  such  use  or  service,  or,  perhaps,  from  the  date 
of  the  expiration  of  each  week  or  month  (depending  upon  the 
unit  period  for  which  property  of  the  kind  is  ordinarily  hired  or 
services  of  the  kind  ordinarily  obtained)  of  such  use  or  service. 

§  294.  (VII)  Statute  of  limitations.  —  The  statutory  period 
which  bars  actions  for  tort  is  frequently,  if  not  generally,  dif- 
ferent from  that  which  bars  actions  on  contract.  The  question 
arises,  therefore :  is  an  action  against  a  tort-feasor  for  restitution 
an  action  for  tort  or  an  action  on  contract  ?  In  form,  of  course, 
it  is  contractual,  but  unless  the  language  of  the  statute  clearly 
indicates  a  contrary  intention,  it  seems  but  reasonable  to  sup- 
pose that  the  different  periods  are  meant  to  apply,  not  to  dif- 
ferent forms  of  action,  but  to  different  causes  of  action,  i.e.  to 
different  kinds  of  wrong.  For  there  is  no  conceivable  reason 
why,  in  the  case  of  a  particular  wrong,  one  form  of  action  should 
be  available  after  another  is  barred ;  the  purpose  of  the  statute 
is  that  upon  the  expiration  of  the  specified  period  no  action  shall 
be  brought  for  the  redress  of  the  wrong.  The  question,  then, 

1  City  of  Newburyport  v.  Fidelity,  etc.,  Ins.  Co.,  1908,  197  Mass. 
596,  84  N.  E.  111.  But  see  York  v.  Farmers'  Bank,  1904,  105  Mo. 
App.  127 ;  79  S.  W.  968,  972,  allowing  interest  from  date  of  demand. 

466 


Chap.  XX]  STATUTE   OF   LIMITATIONS  [§  294 

should  be  stated  in  these  terms :  Is  the  cause  of  action  against 
the  tort-feasor  a  cause  of  action  in  contract,  within  the  meaning 
of  the  term  "  contract  "  in  statutes  of  limitation,  or  is  it  one  in 
tort? 

If  the  obligation  of  the  tort-feasor  to  make  restitution  is 
genuinely  quasi  contractual,  i.e.  a  primary  obligation,  it  may 
well  be  that  the  term  "  contract  "  is  broad  enough  to  include  it. 
But  if,  as  seems  probable  (see  ante,  §  270),  the  obligation  is 
but  a  secondary  one,  arising,  like  the  obligation  to  pay  dam- 
ages, upon  the  breach  of  the  primary  obligation  not  to  commit 
the  tort,  the  only  cause  of  action,  accurately  speaking,  is  the 
commission  of  a  tort,  and  the  statutory  limitation  as  to  torts 
would  seem  to  apply. 

The  former  view,  i.e.  that  the  cause  of  action  is  in  contract, 
as  the  term  is  used  in  the  statute,  rather  than  in  tort,  has  the 
support  of  what  judicial  authority  there  is : 

Kirkman  v.  Phillips,  1872,  7  Heisk.  (54  Tenn.)  222 :  Attach- 
ment bill  to  recover  the  value  of  certain  machinery.  The  bill 
was  dismissed  upon  demurrer,  the  ground  of  demurrer  being  that 
the  recovery  sought  by  the  bill  being  for  a  tort,  the  same  was 
barred  by  the  statute  of  limitation  of  three  years.  The  Su- 
preme Court  held  that  the  demurrer  should  not  have  been  sus- 
tained, NICHOLSON,  C.J.,  saying  (p.  224) :  "If  the  original  owner 
of  the  property  elect  to  sue  for  the  property,  or  for  damages  for 
the  conversion,  the  action  will  be  barred  by  the  statute  of  three 
years.  But  if  the  party  elects  to  sue  for  the  value  of  the  prop- 
erty, the  action  will  be  barred  in  six  years.  It  is  true,  as 
argued,  that  a  wrongdoer  may  obtain  a  title  to  the  property 
by  three  years  adverse  possession,  and  yet  be  liable  for  three 
years  after  his  title  is  perfected  to  pay  the  original  owner  the 
value  thereof.  This  is  a  necessary  consequence  of  the  right 
which  the  original  owner  has  to  elect  whether  he  will  sue  for 
property  or  its  value.  During  six  years  his  right  to  sue  for  the 
value  is  as  perfect  as  his  right  to  sue  for  the  property  within 
the  three  years.  This  right  is  not  interfered  with  by  the  pro- 
visions of  the  Code  abolishing  the  distinctions  in  the  forms  of 
actions.  The  statute  of  limitations  applicable  to  the  cause 
depends  upon  the  nature  and  character  of  the  action,  and  not 

467 


§  294]  RESTITUTION   AS   ALTERNATIVE   REMEDY         [Part  IV 

upon  its  form.  In  the  case  before  us,  the  complainant  has 
elected  to  waive  the  tort  and  to  sue  for  the  value  of  the  property 
converted,  and  in  so  doing  he  is  entitled  to  the  benefit  of  the  six 
years  statute."  1 

Another  question  is  now  encountered :  when  does  the  statute 
commence  to  run  ?  The  answer  to  this  question  depends  upon 
the  answer  to  the  one  just  considered.  If  the  statutory  pro- 
vision as  to  actions  on  contract  applies,  the  period  of  limitation 
must  be  computed  from  the  date  of  the  implied  or  fictitious 
promise  to  make  restitution,  which  is  the  date  of  the  receipt 
by  the  defendant  of  the  benefit  reaped  from  the  tort,  but  not 
necessarily  the  date  of  the  commission  of  the  tort.  On  the 
other  hand,  if  the  provision  as  to  actions  for  tort  applies,  the 
period  must  be  computed  from  the  time  of  the  commission  of 
the  tort,  even  though  the  benefit  sought  to  be  recovered  is  not 
received  until  a  later  date. 

Although  there  is  not  much  authority  on  this  point  either,  it 
has  been  held  in  at  least  one  case  that  the  statute  runs  from  the 
date  of  the  receipt  of  the  benefit  sought  to  be  recovered : 

Miller  v.  Miller,  1828,  7  Pick.  (Mass.)  133 ;  19  Am.  Dec.  264 : 
Assumpsit  for  money  had  and  received.  The  defendant  wrong- 
fully sold  wood  standing  on  land  belonging  to  him  and  the  plain- 
tiff's testator  as  tenants  in  common,  and  payments  were  made 
by  the  purchasers  to  the  defendant  at  different  times  subsequent 
to  the  sales.  The  jury  were  instructed  to  find  a  verdict  for  the 
plaintiff  for  one  half  of  the  amount  which  the  defendant  had  re- 
ceived within  six  years  before  the  commencement  of  the  action, 
and  the  Supreme  Court  upheld  the  instruction.  PARKER,  C.J. 
,(p.  136):  "As  to  the  objection  founded  on  the  statute  of 
limitations,  we  think  the  jury  were  instructed  right,  viz.  that  the 
statute  began  to  run  from  the  time  when  the  money  was  received, 
and  not  from  the  time  of  the  sale  of  the  wood.  In  this  action 
the  plaintiff  affirms  the  sale  and  asks  for  his  share  of  the  proceeds. 

1  See  also  Miller  v.  Miller,  1828,  7  Pick.  (Mass.)  133 ;  19  Am.  Dec. 
264;  WMtaker  v.  Poston,  1908,  120  Term.  207;  110  S.  W.  1019,  1021, 
(approving  Kirkman  v.  Phillips).  But  see  Bell  v.  Bank  of  California, 
1908,  153  Cal.  234,  242-3 ;  94  Pac.  889. 

468 


Chap.  XX]  STATUTE   OF   LIMITATIONS  [§  294 

He  had  a  right  to  waive  his  action  of  trespass  given  by  the 
statute  and  to  consider  the  defendant  as  his  agent  in  disposing 
of  the  wood.  This  is  for  the  benefit  of  the  defendant,  as  he  can 
deduct  all  reasonable  charges,  and  is  answerable  only  to  the 
extent  of  funds  which  he  has  received." 

A  limitation  of  the  doctrine  of  Miller  v.  Miller  was  established, 
however,  in  the  later  case  of  Currier  v.  Studley,1  in  which  it  was 
held  in  substance  that  since  one  who  wrongfully  takes  another's 
property  and  holds  it  until  the  right  of  the  owner  to  recover 
it  is  barred  by  the  statute  becomes  himself  the  owner,  if  he 
subsequently  sells  the  property  and  receives  the  purchase  price 
he  cannot  be  held  liable  by  the  former  owner  for  money  had 
and  received.2 

Under  the  decisions  in  Kirkman  v.  Phillips  and  Miller  v. 
Miller,  and  notwithstanding  the  wholesome  limitation  estab- 
lished by  Currier  v.  Studley,  the  right  to  sue  a  tort-feasor  in  as- 
sumpsit  may  exist  for  many  years  after  the  right  to  sue  in  tort 
has  been  barred  by  the  statute.  Suppose,  for  example,  that 
under  a  statute  of  limitations  requiring  actions  on  contract  to 
be  brought  within  six  years  and  actions  for  conversion  of  goods 
within  three  years,  A  wrongfully  takes  B's  goods  on  August  1, 
1900,  sells  them  on  July  1,  1903,  and  receives  the  proceeds  of  the 
sale  on  June  1,  1904.  The  right  to  sue  for  conversion  would  be 
barred  August  2,  1903,  but  assumpsit  for  goods  sold,  if  allowed 
at  all,  would  be  available  until  August  2,  1906,  and  assumpsit 
for  money  had  and  received  until  June  2,  1910.  Furthermore, 
in  a  jurisdiction  in  which  the  right  to  sue  in  assumpsit  is  limited 
to  cases  in  which  money  has  been  received  by  the  tort-feasor, 
there  would  be  a  period  of  ten  months,  between  the  barring  of 
the  right  to  sue  for  conversion  and  the  inception  of  the  right 
to  sue  for  money  had  and  received,  during  which  B  would  be 
without  any  remedy. 

1 1893,  159  Mass.  17 ;  33  N.  E.  709. 

2  This  decision  was  anticipated  by  Professor  Keener,  who  said,  in 
his  work  on  "Quasi-Contracts,"  at  p.  177:  "If  the  sale  is  not  made 
until  the  injured  party  has  lost  his  right  to  sue  for  the  conversion,  the 
tort-feasor  has  acquired  title,  and  the  sale  was  a  saleof  his  own  property." 

469 


§  295]  RESTITUTION   AS   ALTERNATIVE   REMEDY         [Part  IV 

The  possibility  of  such  an  absurd  result,  it  is  submitted, 
proves  the  unwisdom  of  regarding  the  action  in  assumpsit,  in 
these  cases,  as  an  action  on  contract.  It  would  be  much  more 
reasonable  to  regard  it  as  an  action  in  tort,  for  then  it  might  con- 
sistently be  held  that  the  statute  runs  from  the  date  of  the  com- 
mission of  the  tort,  and  both  remedies  would  be  barred  at  the 
same  time.  It  is  true  that  in  case  the  benefit  resulting  to  the 
tort-feasor  were  not  received  by  him  within  the  period  of  limi- 
tation, the  plaintiff  would  be  deprived  altogether  of  his  election 
to  sue  in  assumpsit ;  but  in  view  of  the  fact  that  he  has  an  action 
for  damages  in  any  event,  this  seems  an  evil  of  smaller  propor- 
tions than  that  of  allowing  the  plaintiff  in  many  cases  to  defeat 
the  policy  of  the  statute  of  limitations  by  the  simple  expedient  of 
electing  to  sue  for  money  had  and  received  instead  of  for  damages. 

§  295.  (VIII)  Effect  of  judgment  against  one  of  two  tort- 
f easors.  —  Whether  the  pursuit  of  one  remedy  to  a  judgment 
against  one  tort-feasor  will  prevent  a  subsequent  resort  to  the 
alternative  remedy  against  another  may  depend  upon  whether 
there  is  a  separate  election  as  to  each  wrongdoer  —  a  question 
hereafter  to  be  considered  (post,  §  299).  But  there  is  another 
and  underlying  question  that  must  be  decided :  will  a  judg- 
ment against  one  tort-feasor  operate  as  a  bar  to  any  and  all 
subsequent  proceedings  against  another?  By  the  weight  of 
authority  it  will  not ; l  but  there  are  some  decisions  to  the  con- 

1  In  the  case  of  joint  tort-f easors :  Lovejoy  v.  Murray,  1865,  3  Wall. 
(U.  ».)  1 ;  Amer.  Bell  Tel.  Co.  v.  Albright,  1887,  32  Fed.  287 ;  Blann 
v.  Crocheron,  1852,  20  Ala.  320 ;  Sheldon  v.  Kibbe,  1819,  3  Conn.  214 ; 
8  Am.  Dec.  176 ;  Elliot  v.  Porter,  1837,  5  Dana  (35  Ky.)  299 ;  30  Am. 
Dec.  689 ;  Johnson  v.  McKenna,  1907,  73  N.  J.  Eq.  1 ;  67  Atl.  395 ; 
Wright  v.  Lathrop,  1825,  2  Ohio  33,  52 ;  15  Am.  Dec.  529 ;  Sanderson 
v.  Caldwell,  1826,  2  Aiken  (Vt.)  195.  And  see  Fox  v.  Northern  Liberties, 
1841,  3  Watts  &  Serg.  (Pa.)  103. 

In  the  case  of  successive  converters:  Matthews  v.  Menedger,  1840, 
2  McLean  (U.  S.  C.  C.)  145;  Fed.  Gas.,  No.  9289  ;  Spivey  v.  Morris, 
1850,  18  Ala.  254 ;  52  Am.  Dec.  224 ;  McGee  v.  Overby,  1851,  12  Ark. 
164;  Atwater  v.  Tupper,  1877,  45  Conn.  144;  29  Am.  Rep.  674; 
Sharp  v.  Gray,  1844,  5  B.  Mon.  (44  Ky.)  4;  Hopkins  v.  Hersey,  1841, 
20  Me.  449 ;  Osterhout  v.  Roberts,  1827,  8  Cow.  (N.  Y.)  43. 

It  has  been  held  that  whether  or  not  a  judgment  is  a  bar,  execution 
is.  White  v.  Philbrick,  1827,  5  Greenl.  (Me.)  147;  17  Am.  Dec.  214; 

470 


Chap.  XX]  EFFECT   OF  JUDGMENT  [§  295 

trary,1  most  of  which  rest  upon  the  theory  that  in  the  case  of 
joint  or  successive  conversions  a  judgment  against  one  converter 
invests  him  with  title  to  the  converted  article. 

At  what  time  title  passes  to  a  converter  is  a  mooted  question. 
It  is  usually  said  that  in  England  title  passes  by  the  judgment, 
while  in  America,  by  the  weight  of  authority,  it  does  not  pass 
until  the  judgment  is  satisfied.  But  the  authorities  are  in  con- 
fusion,2 and  Professor  Ames  advanced  the  theory  that  title  passes 
at  the  time  of  the  conversion,  subject  to  a  right  of  action  in  the 
injured  person  for  the  recovery  of  the  article  or  damages  for 
its  conversion.3 

If  title  does  not  pass  until  satisfaction,  it  is  plain  that  the  entry 
of  judgment  against  one  converter  should  be  no  bar  to  subse- 
quent proceedings  against  another. 

If  title  passes  at  the  time  of  the  conversion,  subject  to  a  right 
of  action  in  the  former  owner,  the  entry  of  judgment  against 
one  converter  should  have  no  effect  upon  the  right  of  action 
against  another.  Said  Professor  Ames : 4 

"Let  us  suppose,  for  instance,  that  B  converts  the  chattel 
of  A,  and,  before  judgment  recovered  against  him  in  Trespass 

Campbell  v.  Phelps,  1822,  1  Pick.  (Mass.)  62 ;  11  Am.  Dec.  139.  But 
see  Osterhout  v.  Roberts,  supra,  and  Sheldon  v.  Kibbe,  supra,  in  which 
it  is  said  that  execution  against  the  person  is  not  a  bar. 

1  In   the   case   of  joint   tort-feasors :    Brown   v .    Wootton,    1605-06, 
Yelv.  67;    Cro.  Jac.  73;    Buckland  v.  Johnson,  1854,  15  C.  B.  145; 
Brinsmead  v.  Harrison,  1872,  L.  R.  7  C.  P.  547 ;   Hunt  v.  Bates,  1862, 
7  R.  I.  217 ;  82  Am.  Dec.  592 ;   Petticolas  v.  City  of  Richmond,  1897, 
95  Va.  456 ;  28  S.  E.  566 ;  64  Am.  St.  Rep.  811. 

In  the  case  of  successive  converters:  See  Lytle  v.  Bank  of  Dothan, 
1899,  191  Ala.  215;  26  So.  6;  Marsh  v.  Pier,  1833,  4  Rawle  (Pa.) 
273 ;  26  Am.  Dec.  131 ;  Fox.  v.  Northern  Liberties,  1841,  3  Watts  & 
Serg.  (Pa.)  103. 

2  See  Buckland  v.  Johnson,  1854,  15  C.  B.  145 ;  Miller  v.  Hyde,  1894, 
161  Mass.  472;   37  N.  E.  760;   25  L.  R.  A.  42;   42  Am.  St.  Rep.  424, 
(and  note) ;   Livingston  v.  Bishop,  1806,  1  Johns.  (N.  Y.)  290;  3  Am. 
Dec.  330 ;  Scott,  "Cases  on  Quasi-Contracts,"  pp.  148-149,  note. 

3  "The  Disseisin  of  Chattels,"  3  Harv.  Law  Rev.  23,  313;  same 
essay,  "  Select  Essays  in  Anglo-American  Legal  History,"  III,  567-80. 
See  also  Professor  Corbin,  "Waiver  of  Tort  and  Suit  in  Assumpsit," 
19  Yale  Law  Jour.  221,  242. 

*  3  Harv.  Law  Rev.  313,  327. 

471 


§  296]  RESTITUTION   AS   ALTERNATIVE   REMEDY         [Part  IV 

or  Trover,  sells  it  to  C,  or  is  in  turn  dispossessed  by  C.  C,  the 
new  possessor,  will  hold  the  chattel,  as  B  held  it,  subject  to 
A's  right  to  recover  it.  The  change  of  possession  simply  en- 
larges the  scope  of  A's  remedies ;  for  his  new  rights  against  C 
do  not  destroy  his  old  rights  to  sue  B,  in  Trespass  or  Trover. 
Nor  will  an  unsatisfied  judgment  against  B  in  either  of  these 
actions  affect  his  right  to  recover  the  chattel  from  C.  It  is  no 
longer  a  question  of  double  vexation  to  one  defendant  for  a 
single  wrong.  Not  until  the  judgment  against  B  is  satisfied  can 
C  use  it  as  a  bar  to  an  action  against  himself."  * 

If  title  passes  upon  the  entry  of  judgment,  a  judgment  against 
one  converter  should  constitute  a  defense  to  one  who  subse- 
quently buys  the  article  from  him,2  but  the  wrongful  act  of  one 
who  joined  in  the  original  conversion,  or  who  purchased  the 
goods  from  the  first  converter  before  the  entry  of  judgment 
against  him,  does  not  become  rightful  merely  by  virtue  of  the 
judgment,3  unless  it  be  held  that  the  judgment  passes  title  as 
of  the  date  of  the  conversion.4 

§  296.  (IX)  Effect  of  judgment  in  favor  of  one  of  two  alleged 
tort-f easors.  —  It  has  been  suggested  that  a  judgment  adverse 
to  the  plaintiff  in  an  action  against  one  of  two  alleged  joint 
wrongdoers  should  bar  any  further  action  against  the  other,  for 
two  reasons :  "  First,  the  plaintiff  has  had  one  day  in  court  on 
the  issue  of  whether  there  was  a  joint  tort  or  not.  Secondly,  it 
would  be  unfair  to  the  defendant  who  won,  to  be  subjected  to  a 
further  action  for  contribution  by  the  second  defendant  who  lost, 
in  those  cases  where  contribution  would  be  allowed."  5  The 

1  Likewise,  a  judgment  against  one  of  two  or  more  joint  converters 
is  declared  by  Professor  Ames  to  be  no  bar  to  an  action  against  another. 

2  But  see,  contra,   Goff  v.  Craven,  1884,  34  Hun   (N.  Y.  Sup.  Ct.) 
150. 

3  Atwater  v.  Tupper,  1877,  45  Conn.  144 ;  29  Am.  Rep.  674. 

4  Buckland  v.  Johnson,  1854,  15  C.  B.  145. 

6  Professor  Corbin,  "Waiver  of  Tort  and  Suit  in  Assumpsit,"  19 
Yale  Law  Jour.  221,  241.  And  see,  accord,  Ferrers  v.  Arden,  1599, 
Cro.  Eliz.  668 ;  Sheldon  v.  Kibbe,  1819,  3  Conn.  214,  220 ;  8  Am.  Dec. 
176 ;  City  of  Anderson  t;.  Fleming,  1903,  160  Ind.  597 ;  67  N.  E.  443  ; 
66  L.  R.  A.  119,  (cf.  Fleming  v.  City  of  Anderson,  1905,  39  Ind.  App. 
343;  76  N.  E.  266,  268) ;  Emery  v.  Fowler,  1855,  39  Me.  326;  63  Am. 

472 


Chap.  XX]         WHAT   CONSTITUTES   AN   ELECTION  [§  298 

first  reason  appears  to  be  sound  in  case  the  judgment  is  one  which 
establishes  the  fact  that  the  plaintiff  has  no  cause  of  action 
against  any  one;  the  second  seems  to  affect  the  justice  of  en- 
forcing contribution  against  one  who  has  proven  that  he  is  not 
a  tort-feasor  rather  than  the  justice  of  allowing  the  plaintiff  to 
proceed  further  against  another  alleged  tort-feasor. 

What  is  the  effect  of  a  judgment  adverse  to  the  plaintiff  in  an 
action  against  one  of  two  successive  alleged  converters?  Or- 
dinarily it  should  not  prevent  further  proceedings  against  the 
other,  for  though  one  is  not  guilty  the  other  may  be.  But  a 
judgment  which  establishes  the  fact  that  the  first  alleged 
converter  had  title  should  be  conclusive  in  favor  of  the 
second.1 

§  297.  (X)  Effect  of  satisfaction  by  one  of  two  tort-feasors.  — 
It  is  hardly  necessary  to  say  that  if  two  joint  wrongdoers  or 
successive  converters  are  sued  separately,  either  for  damages 
or  for  restitution,  the  payment  of  one  judgment  in  whole  or  in 
part  will  operate  to  reduce  the  other  pro  tanto;  and  if  the  sum 
paid  on  one  judgment  is  equivalent  to  the  whole  of  the  other, 
the  latter  will  be  extinguished.2  For  the  person  injured  is  under 
no  circumstances  entitled  to  double  satisfaction  for  a  single 
injury.3 

§  298.  (XI)  What  constitutes  an  election.  —  What  constitutes 
an  election  between  the  right  to  recover  damages  and  the  right 
to  restitution  is  a  question  not  free  from  difficulty.  An  unsatis- 
fied demand  for  the  proceeds  of  a  conversion,  either  upon  the 

Dec.  627.  But  see,  contra,  Old  Dominion,  etc.,  Co.  v.  Bigelow,  1909, 
203  Mass.  159,  216-19 ;  89  N.  E.  193 ;  Nelson  v.  Illinois,  etc.,  R.  Co. 
1910,  98  Miss.  295 ;  53  So.  619 ;  31  L.  R.  A.  (N.  S.)  689. 

1  See  Portland  Gold,  etc.,  Mining  Co.  v.  Stratton's  Independence, 
1907,  158  Fed.  63 ;  85  C.  C.  A.  393 ;   16  L.  R.  A.  (N.  S.)  677 ;  Marsh 
v.  Pier,  1833,  4  Rawle  (Pa.)  273 ;  26  Am.  Dec.  131. 

2  But  see  Westbrook  v.  Mize,  1886,  35   Kan.  299;     10  Pac.  881, 
(satisfied  judgment  against  one  joint  tort-feasor  —  whether  for  all  or 
part  of  the  converted  property  —  bar  to  further  action  against  the 
other) . 

3  Cooper  v.  Shepherd,  1846,  3  C.  B.  266 ;   Ayer  v.  Ashmead,  1863, 
31  Conn.  447 ;   83  Am.  Dec.  154 ;   McCoy  v.  Louisville,  etc.,  R.  Co., 
1905,  146  Ala.  333 ;  40  So.  106. 

473 


§  298]  RESTITUTION   AS   ALTERNATIVE   REMEDY         [Part  IV 

converter,1  or  upon  a  court  into  which  the  money  has  been  paid,2 
is  held  not  to  be  conclusive.  But  the  acceptance,  by  the  owner 
of  goods  wrongfully  sold,  of  the  proceeds  of  the  sale,  is  an  elec- 
tion.3 The  prosecution  of  one  remedial  right  to  judgment  on 
the  merits  —  whether  in  favor  of  the  plaintiff  or  the  defendant 
—  is  likewise  an  election.4  Nemo  debet  bis  vexari  pro  eadem 
causa.  The  effect  of  the  commencement  of  an  action,  either 
in  tort  or  assumpsit,  is  disputed,  but  by  what  is  believed  to  be 
the  weight  of  authority  the  commencement  of  an  action  in  a  court 
of  competent  jurisdiction  is  decisive.5  The  conflict  of  authority 
rests  upon  a  difference  of  opinion  as  to  the  essential  nature  of 
an  election.  By  some  courts,  apparently,  it  is  conceived  to  be 
merely  an  "  unequivocal  act,"  i.e.  an  act  consistent  with  a  de- 
termination to  pursue  one  remedy  but  inconsistent  with  a 
determination  to  pursue  the  other.  In  /Scarf  v.  Jardine*  for 
example,  Lord  BLACKBURN  said : 

"The  principle,  I  take  it,  running  through  all  the  cases  as  to 
what  is  an  election  is  this,  that  where  a  party  in  his  own  mind 

1  Valpy  v.  Sanders,  1848,  5  C.  B.  886 ;  Baker  v.  Hutchinson,  1906, 
147  Ala.  636;  41  So.  809,  811. 

z  Morris  v.  Robinson,  1824,  3  Barn.  &  Cr.  196. 

3  Brewer  v.  Sparrow,  1827,  7  Barn.  &  Cr.  310 ;   Lythgoe  v.  Vernon, 
1860,  5  Hurl.  &  Nor.  180 ;  Smith  v.  Baker,  1873,  L.  R.  8  C.  P.  350. 

4  Hitchin  [or  Kitchin]  v.  Campbell,  1772,  2  W.  Bl.  827 ;   Duncan  & 
Johnson  v.  Stokes,  1873,  47  Ga.  593;   Bacon  v.  Moody,  1903,  117  Ga. 
207;  43  S.  E.  482;   Roberts  v.  Moss,  1907,  127  Ky.  657;  32  Ky.  Law 
Rep.  525 ;  106  S.  W.  297 ;  Ware  v.  Percival,  1873,  61  Me.  391 ;   14  Am. 
Rep.  565;    Walsh  &  McKaig  v.  Chesapeake,  etc.,  Canal  Co.,  1882,  59 
Md.  423;    International  Paper  Co.   v.  Purdy,   1909,   136  App.  Div. 
189;   120  N.  Y.  Supp.  342;   Parker  v.  Panhandle  Nat.  Bank,  1895,  11 
Tex.  Civ.  App.  702 ;  34  S.  W.  196,  198.     And  see  15  Cyc.  259,  n.  50. 

In  Nanson  v.  Jacob,  1887,  93  Mo.  331 ;  6  S.  W.  246 ;  3  Am.  St. 
Rep.  531,  it  was  declared  that  the  allowance  of  a  claim  by  an  assignee 
for  the  benefit  of  creditors  "was  to  all  intents  and  purposes  a  judg- 
ment .  .  .  and  conclusive  as  such." 

6  Daniels  v.  Smith,  1884,  15  111.  App.  339 ;  Thompson  v.  Howard, 
1875,  31  Mich.  309 ;  Thomas  v.  Watt,  1895,  104  Mich.  201 ;  62  N.  W. 
345 ;  Carroll  v.  Fethers,  1899,  102  Wis.  436 ;  78  N.  W.  604.  But  see 
Spurr  ».  Home  Ins.  Co.  1889,  40  Minn.  424 ;  42  N.  W.  206 ;  Otto  v. 
Young,  1910,  227  Mo.  193,  127  S.  W.  9,  18,  and  cases  collected  15  Cyc. 
260,  n.  52. 

•  1882,  7  App.  Cas.  345,  360. 

474 


Chap.  XX]         WHAT   CONSTITUTES   AN   ELECTION  [§  298 

has  thought  that  he  would  choose  one  of  two  remedies,  even 
though  he  has  written  it  down  on  a  memorandum  or  has  in- 
dicated it  in  some  other  way,  that  alone  will  not  bind  him ;  but 
so  soon  as  he  has  not  only  determined  to  follow  one  of  his  reme- 
dies but  has  communicated  it  to  the  other  side  in  such  a  way  as 
to  lead  the  opposite  party  to  believe  that  he  has  made  that  choice, 
he  has  completed  his  election  and  can  go  no  further;  and 
whether  he  intended  it  or  not,  if  he  has  done  an  unequivocal 
act  —  I  mean  an  act  which  would  be  justifiable  if  he  had  elected 
one  way  and  would  not  be  justifiable  if  he  had  elected  the  other 
way  —  the  fact  of  his  having  done  that  unequivocal  act  to  the 
knowledge  of  the  persons  concerned  is  an  election."  l 

But  there  would  seem  to  be  no  harm  in  permitting  one  who 
has  indicated,  by  an  unequivocal  act,  his  intention  to  pursue 
one  remedy,  to  change  his  mind  and  pursue  the  other,  unless 
injustice  will  result  to  the  other  party.  It  has  accordingly  been 
contended  that  "  the  doctrine  of  election  is  really  an  application 
of  the  doctrine  of  estoppel,"  and  that  "  an  election  by  the  party 
having  a  choice  should  not  be  conclusive  upon  him,  until  he  has 
done  an  act  making  it  impossible  for  him  to  choose  again,  or 
making  it  injurious  to  the  public  or  unjust  to  the  opposite 
party."  2  If  this  view  be  accepted,  neither  the  commence- 
ment of  an  action  nor  any  subsequent  proceeding  short  of  a 
judgment  in  favor  of  the  plaintiff  or  against  him  on  the  merits, 
constitutes  an  election.  For  the  plaintiff  should  always  be 
permitted,  upon  terms  that  will  save  the  defendant  from  prej- 
udice, to  amend  his  pleadings  or  voluntarily  to  discontinue  his 
action  and  commence  another.  Likewise,  the  receipt,  by  the 
owner  of  goods  tortiously  sold,  of  the  proceeds  of  such  sale, 
is  not  an  act  which  should  estop  the  injured  party  from  re- 
covering damages  for  the  conversion  in  excess  of  the  amount 
received  by  him. 

1  See  also  W.  H.  Griffith,  ."Election  of  Remedies,"  16  Law  Quart. 
Rev.  160. 

2  Professor  Corbin,  "Waiver  of  Tort  and  Suit  in  Assumpsit,"  19 
Yale  Law  Jour.  221,  239.     And  see  Trimble  t;.  Bank,  1897,  71  Mo. 
App.  467,  486. 

475 


§  299]  RESTITUTION   AS   ALTERNATIVE   REMEDY         [Part  IV 

§  299.  Same :  The  case  of  joint  tort-feasors.  —  As  has  been 
stated,  the  obligation  of  joint  wrongdoers  to  pay  damages  is 
held  in  America  to  be  joint  and  several ;  while  the  obligation  to 
make  restitution,  upon  principle  at  least,  is  several  (ante,  §  289). 
May  the  person  injured  sue  one  of  two  joint  wrongdoers  for 
damages  and  the  other  for  restitution  ?  Or  is  an  election  as  to 
one  conclusive  in  favor  of  both?  The  authorities  are  not  har- 
monious, but  the  true  rule  is  believed  to  be  that,  subject  to  the 
limitation  that  a  judgment  in  favor  of  or  against  one  tort-feasor 
may  be  held  to  bar  all  subsequent  proceedings  against  the 
other  (ante,  §§  295,  296),  the  person  injured  is  entitled  to  a 
separate  election  against  each  tort-feasor.1  It  has  been  con- 
tended that  the  bringing  of  an  action  for  goods  sold  and 
delivered  against  one  joint  tort-feasor  is  an  election  to  treat 
the  transaction  as  a  sale,  and  that  subsequently  to  bring 
suit  for  damages  against  another  is  inconsistent  and  absurd.2 
But  a  conclusive  answer  to  this  argument  is  that  it  rests 
solely  upon  the  fiction  that  the  bringing  of  assumpsit  turns  a 
conversion  into  a  sale;  that  -this  fiction  is  indulged  for  the 
purpose  of  giving  a  remedy  and  should  not  be  employed  to 
deny  a  remedy;  and  that  there  is  no  injustice  or  hardship 
to  two  joint  wrongdoers  in  allowing  a  separate  election  of 
remedies  against  each. 

§  300.  Same :  The  case  of  successive  converters.  —  If  it  is 
true,  as  contended  in  the  preceding  section,  that  there  is  a  sep- 
arate election  against  each  of  two  or  more  joint  tort-feasors,  it 
would  seem  to  follow  that  in  case  of  successive  converters  of  the 
same  property  an  election  as  to  one  converter  is  not  conclusive 
as  to  another.  For  example,  if  A's  goods  are  seized  by  X  and 
subsequently  sold  by  X  to  Y,  who  refuses  to  deliver  them  up  to 
A,  the  commencement  of  an  action  against  X,  even  though  held 

1  See  Elliot  v.  Porter,  1837,  5  Dana  (35  Ky.)  299 ;    30  Am.  Dec. 
689 ;   In  re  Pierson's  Estate,  1897,  19  App.  Div.  478 ;   46  N.  Y.  Supp. 
557,  562;   Huffman  v.  Hughlett,  1883,  11  Lea  (79  Tenn.)  549. 

2  Terry  v.  Munger,  1890,  121  N.  Y.  161 ;  24  N.  E.  272;  8  L.  R.  A. 
216 ;  18  Am.  St.  Rep.  803.     See  also  Du  Bose  v.  Marx,  1875,  52  Ala. 
506,  510 ;  Floyd  v.  Browne,  1829,  1  Rawle  (Pa.)  121 ;   18  Am.  Dec. 
602. 

476 


Chap.  XX]         WHAT   CONSTITUTES   AN   ELECTION  [§  300 

to  be  an  election  as  to  X,  should  not  be  regarded  as  an  election 
as  to  Y.1 

If,  in  the  case  just  stated,  X  purports  to  sell  the  goods  as  A's 
agent,  the  bringing  of  an  action  by  A  against  X  to  recover  the 
proceeds  of  the  sale  as  money  had  and  received  to  A's  use  may 
be  evidence  of  a  ratification  of  the  sale ; 2  and,  of  course,  if  the 
sale  is  ratified  Y  cannot  be  held  for  conversion.  Moreover, 
even  if  X  does  not  profess  to  act  for  A,  the  bringing  of  an  action 
of  assumpsit  by  A  against  X  and  the  attachment  of  the  goods 
converted  as  the  property  of  X,  may,  it  seems,  estop  A  to  sue  Y, 
in  case  Y  buys  the  goods  from  X  without  knowledge  of  the 
conversion,  and  in  reliance  upon  the  evidence  of  ownership 
afforded  by  A's  conduct  in  suing  X  in  assumpsit  and  attaching 
the  goods  as  X's.3 

1  Rice  v.  Reed,  [1900]   1  Q.  B.  54;  Huffman  v.  Hughlett,  1883,  11 
Lea  (79  Tenn.)  549.     In  the  latter  case  the  court,  speaking  of  waiver 
of  tort,  said  (p.  554) :   "It  is  simply  an  election  between  remedies  for 
an  act  done,  leaving  the  rights  of  the  injured  party  against  the  wrong- 
doers unimpaired  until  he  has  obtained  legal  satisfaction.     If  it  were 
otherwise,  the  suing  of  any  one  of  a  series  of  tort-feasors,  even  the  last, 
on  an  implied  promise,  where  there  was  clearly  no  contract,  would  give 
him  a  good  title  and  release  all  the  others." 

2  See  Marsh  v.  Pier,  1833,  4  Rawle  (Pa.)  273 ;  26  Am.  Dec.  131. 

3  Nield  v.  Burton,  1882,  49  Mich.  53 ;    12  N.  W.  906.     In  this  case 
it  was  said  that  the  fact  that  the  action  against  the  first  converter  was 
brought  in  a  court  which  was  without  jurisdiction  did  not  affect  the 
estoppel.     See   also    Rowe   v.   Sam  Weichselbaum  Co.,  1908,  3  Ga. 
App.  504 ;   60  S.  E.  275. 


477 


INDEX 

(References  are  to  Sections] 

ABDUCTION  OF  CHILD  OR  SERVANT.    See  WAIVER  OP  TORT. 
ACCOUNT : 

overpayment  under  mistake  as  to,  179. 
ACTION  FOR  RESTITUTION: 

as  alternative  remedy  for  repudiation  or  breach  of  contract.    See 
RESCISSION  OF  CONTRACT. 

as  alternative  remedy  for  tort.    See  WAIVER  OP  TORT. 
ADMINISTRATOR.    See  EXECUTOR  OR  ADMINISTRATOR. 
AGENCY.    See  PRINCIPAL  AND  AGENT. 
AMBIGUITY  IN  CONTRACT.    See  VOID  CONTRACT. 
ANNUITY : 

money  paid  for  void  annuity,  60. 
APPRENTICE  : 

services  rendered  by  one  who  mistakenly  believes  himself  to  have 
been  legally  apprenticed,  184. 

enticement  of.    See  WAIVER  OF  TORT. 
ARREST.    See  DURESS. 
ASSESSMENT.    See  TAX  OR  ASSESSMENT. 
ASSUMPSIT  : 

as  remedy  for  enforcement  of  quasi  contractual  obligations,  2. 

See  MONEY  PAID  ;  GOODS  ;   SERVICES  RENDERED  ;   RESCISSION  OP 

CONTRACT  ;  WAIVER  OF  TORT. 
ASSUMPTION  OF  RISK: 

incompatible  with  mistake,  16. 

in  case  of  benefit  conferred  under  contract  unenforceable  because 
of  Statute  of  Frauds,  94. 

in  case  of  benefit  conferred  under  contract  unenforceable  because 
of  impossibility  of  performance,  112-114. 

in  case  of  benefit  conferred  under  illegal  contract,  133. 

in  case  of  benefit  conferred  under  contract  unenforceable  because 
of  plaintiff's  breach,  164,  165. 

See  MISRELIANCE. 

BAILEE  : 

right  of,  to  recover  for  services  in  preservation  of  property,  207. 
BANK.    See  NEGOTIABLE  INSTRUMENTS  ;  USURY. 
BENEFIT,  RECEIPT  OF : 

as  essential  element  of  quasi  contractual  obligation,  8. 

in  case  of  benefit  conferred  under  contract  unenforceable  because 

of  impossibility  of  performance,  115-124. 
in  case  of  benefit  conferred  through  dutiful  intervention  in  another's 

affairs,  198. 

in  case  of  waiver  of  tort,  272-275. 
BENEFIT,  RETENTION  OF,  INEQUITABLE  : 
as  element  of  quasi  contractual  obligation,  9. 
when  plaintiff  guilty  of  misconduct  toward  defendant,  21. 
when  plaintiff  under  moral  obligation  to  confer  benefit,  22. 

479 


INDEX 

[References  are  to  Sections] 

BENEFIT,  RETENTION  OF,  INEQUITABLE  —  Continued: 
when  plaintiff  fails  to  place  defendant  in  statu  quo,  23. 
when  plaintiff  has  received  equivalent  benefit,  24. 
when  defendant  has  changed  his  position,  25-31. 
in  case  of  benefit  conferred  in  misreliance  on  a  non-existent  con- 
tract, 55-58. 
in  case  of  benefit  conferred  under  contract  unenforceable  because 

of  Statute  of  Frauds,  95-99. 

in  case  of  benefit  conferred  under  contract  which  becomes  un- 
enforceable because  of  plaintiff's  breach,  166-172. 
in  case  of  benefit  conferred  under  constraint  of  tax  or  assessment, 

243. 

BETTERMENTS.     See  IMPROVEMENTS  ON  LAND. 
BILL   OF   LADING: 

money  paid  under  mistake  as  to  genuineness  of  bill  of  lading 

attached  to  draft,  91. 

BILLS,      NOTES,     AND      CHECKS.     See     NEGOTIABLE  INSTRU- 
MENTS ;  OVERDRAFT. 
BONDS.     See  SECURITIES. 
BREACH   OF   CONTRACT: 

money  paid,  services  rendered,  or  property  transferred  under  con- 
tract which  becomes  unenforceable  because  of  plain- 
tiff's breach,  162-178. 
breach  of  condition  implied  in  law,  165. 
effect  of  willful  breach,  166-172. 
service  contracts,  174. 
building  and  like  contracts,  175. 
contracts  for  sale  of  goods,  176. 
contracts  for  the  payment  of  money,  177. 
measure  of  recovery,  178. 
See  RESCISSION  OF  CONTRACT. 
BUILDING : 

right  to  recover  value  of  labor  and  materials  in  case  of  destruc- 
tion of  building  in  course  of  improvement,  116-118. 
See  IMPROVEMENTS  ON  LAND. 
BUILDING   CONTRACTS: 

right  "of  contractor  to  recover  for  labor  and  materials  furnished 
under  contract  which  becomes  unenforceable  be- 
cause of  the  contractor's  breach,  175. 
BURIAL   OF   THE   DEAD: 

money  paid  or  services  rendered  in,  205. 
BUSINESS : 

money  paid  under  constraint  of  actual  or  threatened  injury  to,  218. 
tax  or  assessment  paid  under  constraint  of  actual  or  threatened 
injury  to,  242. 

CARRIER : 

is  obligation  of,  quasi-contractual?  1,  n. 

right  of,  to  recover  freight  in  ease  of  excusable  loss  of  goods,  120. 
right  of  owner  of  goods  to  recover  prepaid  freight  in  case  of  ex- 
cusable loss  of  goods,  129. 

right  of,  to  recover  for  services  in  preservation  of  property,  207. 
right  to  recover  illegal  charges  exacted  by,  220,  221. 
See  VESSEL. 

480 


INDEX 

[References  are  to  Sections] 

CAUSE   OF  ACTION: 

when  cause  of  action  for  benefit  conferred  under  mistake  arises,  32. 
CHANGE    OF   POSITION   BY    DEFENDANT: 
as  justifying  retention  of  benefit,  25. 
must  be  irrevocable,  26. 

payment  over  or  settlement  with  principal,  27. 
payment  over  by  executor  or  administrator,  28. 
beneficial  disposition  of  money  or  goods  as  a  defense,  29,  59. 
accidental  loss  or  theft  of  money  or  goods  as  a  defense,  30. 
as  affecting  right  to  recover  money  paid  under  mistake  as  to 

genuineness  of  negotiable  instrument,  85. 

as  affecting  right  to  recover  money  paid  under  contract  which 
becomes  enenforceable  because  of  impossibility  of 
performance,  131. 
CHATTELS.     See  GOODS. 
CHECKS.     See  NEGOTIABLE  INSTRUMENTS. 

CITY.     See  MUNICIPAL   CORPORATION;    ULTRA  VIRES   CONTRACTS. 
CLOUD    ON   TITLE: 

tax  or  assessment  paid  to  remove,  239. 
COLLATERAL   FACT: 
mistake  as  to,  18,  19. 
COMPOSITION   WITH   CREDITORS: 

money  paid  or  property  transferred  for  purpose  of  obtaining  ac- 
ceptance of,  141. 

COMPROMISE    OR   SETTLEMENT: 
incompatible  with  mistake,  17. 

money  paid  pursuant  to  compromise  or  settlement,  17. 
COMPULSION.     See  DURESS;     LEGAL  PROCEEDINGS;     JUDGMENT; 

TAX  OR  ASSESSMENT. 

CONDITION   IMPLIED    IN   LAW.     See  BREACH  OP  CONTRACT. 
CONSCIENCE.     See  BENEFIT,  RETENTION  OF,  INEQUITABLE. 
CONSIDERATION : 

plaintiff's  failure  to  return,  as  justifying  retention  of  benefit  by 

defendant,  23. 

failure  of.  See  MISRELIANCE  ;  STATUTE  OF  FRAUDS  ;  IMPOS- 
SIBILITY OF  PERFORMANCE  ;  RESCISSION  OF  CON- 
TRACT. 

CONSTRAINT.     See  DURESS  ;     LEGAL  PROCEEDINGS  ;     JUDGMENT  ; 
TAX  OR  ASSESSMENT;      DISCHARGE  OF  ANOTHER'S 
OBLIGATION;    INDEMNITY;    CONTRIBUTION. 
CONTRACT : 

money  paid  or  other  benefit  conferred  under  mistake  as  to  terms 
of  contract  or  fact  affecting  obligation  to  per- 
form, 179-182. 

money  paid  in  performance  of  contract  reformable  in  equity,  180. 
money  paid  in  performance  of  parol  contract  which  does  not 

express  intention  of  parties,  181. 
money  paid  by  drawee  of  negotiable  paper  under  mistake  as  to 

state  of  drawer's  account,  182. 

See  BREACH  OF  CONTRACT  ;  ILLEGAL  CONTRACT  ;  IMPOSSIBILITY  OF 
PERFORMANCE  ;  STATUTE  OF  FRAUDS  ;  VOID  CON- 
TRACT ;  RESCISSION  OF  CONTRACT. 

CONTRACT,   BREACH   OF.     See    BREACH   OF   CONTRACT;      RE- 
SCISSION OF  CONTRACT. 
CONTRACTS  OF   RECORD.     See  JUDGMENT. 

481 


INDEX 

[References  are  to  Sections] 

CONTRACTS  FOR   SALE   OP  GOODS.       See  GOODS. 
CONTRACTS  FOR  SALE  OF  LAND.     See  STATUTE    OF  FRAUDS. 
CONTRACTS   IMPLIED   IN   LAW.     See  QUASI  CONTRACTS. 
CONTRACTS   IMPOSSIBLE  OF  PERFORMANCE.     See     IMPOS- 
SIBILITY OF  PERFORMANCE. 
CONTRACTS    NOT     TO    BE     PERFORMED    WITHIN     ONE 

YEAR.     See  STATUTE  OF  FRAUDS. 
CONTRACTS   TO   SUPPORT: 

performance  by  one  person  of  another's  contractual  obligation 

to  support  a  third  person,  209. 

CONTRACTS  UNDER  SEAL.     See  INSTRUMENTS  UNDER  SEAL. 
CONTRIBUTION : 

right  of  surety  to,  254. 
right  of  tort-feasor  to,  255-257,  259. 
CONVERSION : 

right  of  innocent  converter  to  recover  for  his  services  in  enhanc- 
ing value  of  converted  property,  190. 
See  WAIVER  OF  TORT. 

CORPORATIONS.  See  ULTRA  VIRES  CONTRACTS;  CARRIERS; 
PUBLIC  SERVICE  CORPORATIONS;  MUNICIPAL 
CORPORATION. 

COUNTY.     See  MUNICIPAL  CORPORATION  ;  ULTRA  VIRES  CONTRACTS. 
CUSTOMARY  OBLIGATIONS : 

as  quasi  contracts,  1. 
CUSTOMS   DUTY.     See  TAX  OR  ASSESSMENT. 

DAMAGES : 

recovery  of  interest  as,  34. 
See  MEASURE  OF  RECOVERY. 
DEATH   OF   CONTRACTOR   OR  SERVANT: 

right  to  recover  value  of  services  rendered  under  contract  which 
becomes  impossible  of  performance  because  of  death 
of  contractor,  122,  123. 
DEBT: 

overpayment  of,  by  mistake,  179. 
DECEIT.     See  WAIVER  OF  TORT. 
DEED: 

tax  or  assessment  paid  to  enable  one  to  have  deed  recorded,  241. 
DEFENDANT    IN    DEFAULT    UNDER    A    CONTRACT.     See 
STATUTE    OF    FRAUDS;       IMPOSSIBILITY    OF    PER- 
FORMANCE ;       ILLEGAL    CONTRACTS  ;       RESCISSION 
OF  CONTRACT. 
DEMAND,   NECESSITY   FOR: 

in  case  of  benefit  conferred  by  mistake,  32. 

in  case  of  benefit  conferred  under  contract  unenforceable  because 

of  Statute  of  Frauds,  108. 

in  case  of  benefit  conferred  under  illegal  contract,  150. 
in  case  of  void  tax  or  assessment  paid  under  constraint,  245. 
in    case    of    rescission   of    contract   for   repudiation   or    breach, 

267. 
DISCHARGE   OF  ANOTHER'S   OBLIGATION: 

money  paid,  services  rendered,  or  goods  furnished  in  discharge  of 
another's  obligation,  under  doctrine  of  dutiful  inter- 
vention in  another's  affairs,  193-196,  202-205,  209, 
210 

482 


INDEX 

[References  are  to  Sections] 

DISCHARGE  OF  ANOTHER'S  OBLIGATION  —  Continued: 

money  paid  or  other  benefit  conferred  in  discharge  of  another's 

obligation,  under  constraint  of  law,  247-259. 
See  INDEMNITY  ;    CONTRIBUTION. 
DISSEISEE : 

liability  of,  for  use  and  occupation,  284. 
DISTRESS : 

money  paid  in  discharge  of  another's  obligation  to  prevent  sale 

of  plaintiff's  goods,  248-250. 
DRAWER   OF   NEGOTIABLE    INSTRUMENT: 

money  paid  under  mistake  as  to  genuineness  of  signature  of, 

80-90. 

money  paid  under  mistake  as  to  state  of  account  of,  19,  182. 
DRAWEE    OF   NEGOTIABLE    INSTRUMENT: 

money  paid  under  mistake  by,  as  to  genuineness  of  body  of  instru- 
ment, or  of  signature  of  drawer  or   indorser,  80-90. 
money  paid  under  mistake  by,  as  to  state  of  drawer's  account, 

19,  192. 

DRUNKARDS.     See  INSANE  PERSONS. 
DURESS : 

money  paid,  services  rendered,  goods  delivered,  or  other  benefit 

conferred  under,  211-227. 
what  constitutes,  212. 

sundry  instances  of  obligation  to  make  restitution  classified  accord- 
ing to  means  of  compulsion  employed,  214-227. 
duress  of  person,  214. 
threat  of  legal  proceedings,  215. 
seizure  or  detention  of  personal  property,  216. 
assertion  of  fictitious  lien  on  real  property  or  refusal  to  dis- 
charge valid  lien,  217. 
injury  to  business  or  employment,  218. 
oppressive  refusal  to  discharge  a  duty ;   illegal  fees  of  public 

officers,  219. 

same :   illegal  charge  of  public  service  corporations,  220-221. 
oppressive  refusal  to  loan  money  at  legal  rate  of  interest, 

222-227. 

See  JUDGMENT  ;  TAX  OR  ASSESSMENT. 
DUTIFUL   INTERVENTION   IN   ANOTHER'S   AFFAIRS: 

money  paid,  services  rendered,  goods  furnished,  or  other  benefit 
conferred  through  dutiful  intervention  in  another's 
affairs,  191-210. 

EJECTMENT : 

right  of  ejected  occupant  of  land  to  value  of  improvements  made 

and  taxes  paid  by  him,  187. 
ELECTION   OF    REMEDY: 

what  constitutes,  in  case  of  repudiation  or  breach  of  contract,  266. 
what  constitutes,  in  case  of  waiver  of  tort,  298-300. 
ENGAGEMENT   OF   HONOR: 

benefit  conferred  in  performance  of,  65. 
EQUITY : 

right  to  recover  at  law  money  paid  in  performance  of  contract 

reformable  in  equity,  180. 

right  of  bona  fide  occupant  who  has  made  improvements  on  land 
to  relief  in  equity,  187. 

483 


INDEX 

[References  are  to  Sections] 

EXECUTOR   OR  ADMINISTRATOR: 

payment  over  as  defense  to,  28. 

money  paid  by,  under  mistake  of  fact,  185. 
EXTRINSIC   FACT: 

mistake  as  to,  18,  19. 

FAILURE   OF   CONSIDERATION.     See  CONSIDERATION. 
FALSE   IMPRISONMENT.     See  WAIVER  OF  TORT. 
FAMILY    RELATIONSHIP: 

presumption  that  services  are  rendered  gratuitously,  51. 

See  HUSBAND  AND  WIFE. 
FEES.     See  PUBLIC  OFFICERS. 
FINDER   OF   PROPERTY: 

right  of,  to  recover  for  services  in  preservation  of  property,  207. 
FOREIGN    LAW.     See  MISTAKE  OF  LAW. 
FORGERY.     See  NEGOTIABLE  INSTRUMENTS. 
FORGOTTEN   FACTS: 

money  paid  under  mistake  of  fact  once  known  but  forgotten,  14. 
FRAUD : 

of  defendant  as  affecting  right  to  recover  benefit  conferred  under 
illegal  contract,  141-142. 

See  WAIVER  OF  TORT. 

FRAUD,    STATUTE    OF.     See  STATUTE  OF  FRAUDS. 
FREIGHT,    RECOVERY   OF.     See  CARRIER  ;    VESSEL. 
FUNERAL   EXPENSES.     See  BURIAL  OF  THE  DEAD. 

4 

GAMBLING.     See  WAGERING  CONTRACTS. 
GIFT   OR   GRATUITY: 

money  paid  or  services  rendered  as,  46-51,  199. 

disappointed  hope  of  reward  or  legacy,  48. 

burden  of  proving  that  services  were  not  gratuitous,  50. 

same :   effect  of  family  relationship,  51. 

effect  of  consumption  of  goods  supposed  by  recipient  to  be  a 

gift,  57. 
GOODS : 

money  paid  for  goods  that  have  perished  or  been  destroyed,  60. 

goods  delivered  under  contract  unenforceable  because  of  Statute 
of  Frauds.     See  STATUTE  OF  FRAUDS. 

money  paid  for  goods  under  contract  unenforceable  because  of 
Statute  of  Frauds.     See  STATUTE  OF  FRAUDS. 

right  to  recover  value  of  labor  and  materials  in  case  of  destruction 
of  goods  in  course  of  alteration  or  repair,  119. 

right  to  recover  prepaid  purchase  price  of  goods  in  case  of  contract 
becoming  impossible  of  performance  by  seller,  128. 

goods  delivered  under  contract  which  becomes  unenforceable  be- 
cause of  seller's  breach,  176. 

services  rendered  in  improving  or  transporting  goods  under  mis- 
take as  to  ownership,  190. 

delivered  under  duress.     See  DURESS. 

money  paid  under  duress  of  goods.     See  DURESS. 

money  paid  in  discharge  of  another's  obligation  to  prevent  sale 
of  plaintiff's  goods,  248-250. 

sale  of,  in  discharge  of  another's  obligation,  251. 

application  of  doctrine  of  rescission  of  contract  to  cases  of  goods 
sold.     See  RESCISSION  OF  CONTRACT. 

assumpsit  as  remedy  for  conversion  of.     See  WAIVER  OF  TORT. 

484 


INDEX 

[References  are  to  Sections] 

GOODS   SOLD   AND   DELIVERED.     See  GOODS. 
GOVERNMENT,   ACT   OP: 

right  to  recover  benefit  conferred  under  contract  which  becomes 

impossible   of   performance   because   of   an   act   of 

government,  124. 

HIGHWAYS.     See  REPAIRS. 

HONOR.     See  ENGAGEMENT  OP  HONOR. 

HOLDER   FOR   VALUE.     See  NEGOTIABLE  INSTRUMENTS. 

HOUSEHOLD.     See  FAMILY  RELATIONSHIP. 

HUSBAND   AND    WIFE: 

services  rendered  by  one  who  mistakenly  believes  himself  or  her- 
self to  be  legal  husband  or  wife,  184. 

obligation  of  husband  to  pay  for  necessaries  furnished  to  wife 
and  children,  203. 

obligation  of  husband  to  pay  funeral  expenses  of  wife,  205. 

See  FAMILY  RELATIONSHIP. 

IGNORANTIA  JURIS  NON   EXCUSAT.     See  MISTAKE  OF  LAW. 
ILLEGAL   CONTRACT: 

money  paid  or  other  benefit  conferred  under  illegal  contract, 

132-153. 
where  plaintiff  was  ignorant  of  fact  making  contract  illegal, 

137. 

where  plaintiff  was  not  in  pari  delicto  with  defendant,  138-142. 
where  plaintiff  withdrew  before  illegal  purpose  was  accom- 
plished, 144-147. 
illegal  transactions  by  agent,  148. 
illegal  transactions  by  partner,  149. 
necessity  of  demand,  150. 
statute  of  limitations,  150. 
interest,  150. 

money  paid  under  marriage  brokage  contract,  151. 
money  paid  under  wagering  contract,  152. 
money  paid  or  other  benefit  conferred  under  contract  made  or  to 

be  performed  on  Sunday,  153. 
See     IN     PARI    DELICTO  ;    Locus  POSNITENTLB  :   ULTRA    VIRES 

CONTRACTS  ;    USURY. 
ILLNESS   OF   CONTRACTOR   OR   SERVANT: 

right  to  recover  for  services  rendered  under  a  contract  which  be- 
comes impossible  of  performance  because  of  illness 
of  contractor,  122,  123. 
IMPOSSIBILITY   OF   PERFORMANCE: 

money  paid,  services  rendered,  or  other  benefit  conferred  under 
contract  unenforceable  because  of  impossibility  of 
performance,  109-131. 
where  plaintiff's  performance  is  prevented,  111-126. 

destruction  of  building  in  course  of  improvement,  116. 
loss  of  goods  in  course  of  carriage,  120. 
loss  of  vessel  in  course  of  seaman's  service,  121. 
illness  or  death  of  contractor,  122,  123. 
act  of  government,  124. 
measure  of  recovery,  125. 
where  defendant's  performance  is  prevented,  127-131. 

recovery  of  prepaid  purchase  price  of  goods  or  land,  128. 

485 


INDEX 

[References  are  to  Sections] 

IMPOSSIBILITY  OF  PERFORMANCE  —  Continued: 
recovery  of  prepaid  freight,  129. 
enforcement  of  restitution  impracticable,  130. 
enforcement  of  restitution  inequitable,  131. 
IMPRISONMENT.     See  DURESS. 

IMPROVEMENT   OF   PERSONAL  PROPERTY.     See  GOODS. 
IMPROVEMENTS   ON   LAND: 

right  to  recover  for,  by  purchaser  or  lessee  under  contract  unen- 
forceable because  of  Statute  of  Frauds,  102. 
right  to  recover  for,  by  person  who  mistakenly  supposed  he  was 

owner,  186-189. 
See  BUILDING. 
INCIDENTAL  BENEFITS: 

right  to  recover  for,  49. 

INDEBITATUS  ASSUMPSIT.     See  ASSUMPSIT. 
INDEFINITENESS : 

money  paid  or  other  benefit  conferred  under  contract  void  for 

indefiniteness,  64. 

contract  void  for,  distinguished  from  engagement  of  honor,  65. 
INDEMNITY : 

right  of  surety  to,  253. 
right  of  tort-feasor  to,  258,  259. 
INDORSER  OF  NEGOTIABLE   INSTRUMENT: 

money  paid  under  mistake  as  to  genuineness  of  signature  of, 

80-90. 
INFANTS : 

money  paid  or  other  benefit  conferred  under  contract  of  infant,  69. 
necessaries  furnished  to,  202,  203. 
See  WAIVER  OF  TORT. 
INFRINGEMENT     OF     PATENT     RIGHTS.     See    WAIVER  OP 

TORT. 
INJURY   TO   BUSINESS   OR  EMPLOYMENT: 

money  paid  under  constraint  of  threatened  injury  to  business'  or 

employment,  218. 
tax  or  assessment  paid  under  constraint  of  actual  or  threatened 

injury  to  business,  242. 
INNKEEPER : 

nature  of  obligation  of,  1,  n. 
IN   PARI    DELICTO: 

money  paid  or  other  benefit  conferred  under  illegal  contract  by 
plaintiff  who  was  not  in  pari  delicto  with  defendant, 
138-143. 

where  prohibition  is  aimed  at  defendant's  act,  140. 
where  plaintiff  was  induced  to  contract  by  fraud  or  duress, 

141,  142. 

order  of  proof  as  test  of  par  delictum,  143. 
INSANE   PERSONS: 

money  paid  or  other  benefit  conferred  under  contract  of  insane  per- 
son, drunkard,  or  spendthrift,  70. 
necessaries  furnished  to,  202. 
See  WAIVER  OP  TORT. 
INSTRUMENT   UNDER   SEAL: 

money  paid  or  other  benefit  conferred  in  reliance  upon  an  instru- 
ment under  seal  void  for  want  of  agent's  authority, 
73. 

486 


INDEX 

[References  are  to  Sections] 

INSTRUMENT  UNDER  SEAL  — Continued: 

money  paid  or  other  benefit  conferred  in  reliance  upon  an  instru- 
ment under  seal  so  executed  by  agent  as  to  defeat 
its  purpose,  74. 

application  of  doctrine  of  rescission  of  contract  to,  264. 
INSURANCE : 

money  paid  to  insured  with  knowledge  that  policy  was  obtained 

by  fraud,  13. 
money  paid  to  assignee  of  policy  in  ignorance  that  building  had 

been  destroyed  by  original  holder,  19. 
money  paid  for  insurance  of  goods  mistakenly  supposed  to  be  on 

board  ship,  61. 
money  paid  to  insure  ship  by  one  who  mistakenly  supposed  he 

was  owner,  61. 
measure  of  recovery,  in  action  to  recover  premiums  paid  on  a 

•policy  which  is  terminated  by  war,  126. 
money  paid  under  illegal  insurance  contract  induced  by  fraud  of 

agent,  141. 

money  paid  under  mistake  as  to  terms  or  requirements  of  insur- 
ance contract,  179. 
INTEREST,    RECOVERY   OF  : 

in  case  of  money  paid  by  mistake,  34. 

in  case  of  benefit  conferred  under  contract  unenforceable  because 

of  Statute  of  Frauds,  108. 

in  case  of  benefit  conferred  under  illegal  contract,  150. 
in  case  of  void  tax  or  assessment  paid  under  constraint,  244. 
in  case  of  waiver  of  tort,  293. 
INTERFERENCE     WITH     BUSINESS     OR     EMPLOYMENT. 

See  INJURY  TO  BUSINESS  OR  EMPLOYMENT. 
INTOXICATING   LIQUOR: 

parties  to  illegal  contract  for  sale  of,  not  in  part  delicto,  140. 
INVALID   CONTRACT.     See  VOID  CONTRACT. 

JOINT  OBLIGOR.  See  INDEMNITY  ;  CONTRIBUTION  ;  WAIVER  OP  TORT. 
JUDGMENT : 

as  quasi  contractual  obligation,  1. 

money  paid  or  other  benefit  conferred  under  constraint  of  judg- 
ment, 229-236. 
in  general :  res  judicata,  229. 
void  judgment,  230. 

judgment  satisfied  but  not  discharged,  231. 
judgment  subsequently  reversed,  232-236. 
See  WAIVER  OF  TORT. 

KNOWLEDGE  : 

benefit  conferred  with  knowledge  of  facts,  13. 
benefit  conferred  in  ignorance  of  fact  but  with  means  of  knowl- 
edge, 15. 

LACHES : 

as  a  defense,  in  general,  31. 

as  a  defense  to  action  to  recover  money  paid  under  a  mistake  aa 

to  genuineness  of  negotiable  instrument,  92. 
LAND: 

money  paid  by  mistake  for  non-existent  land,  60. 

money  paid  by  mistake  for  defective  title,  63. 

487 


INDEX 
[References  are  to  Sections] 

LAND  —  Continued: 

money  paid  for  land  under  contract  unenforceable  because  of 

Statute  of  Frauds.     See  STATUTE  OF  FRAUDS. 
conveyed   under   contract   unenforceable   because  of  Statute   of 

Frauds.     See  STATUTE  OF  FRAUDS. 
improvements  on,  by  purchaser  or  lessee  under  contract  unen^- 

forceable  because  of  Statute  of  Frauds,  102. 

use  and  occupation  of,  by  purchaser  or  lessee  under  contract  un- 
enforceable because  of  Statute  of  Frauds,  97. 
right  to  recover  prepaid  purchase  price  of  land  in  case  of  contract 
becoming  impossible  of  performance  by  vendor,  128. 
right  to  recover  taxes  paid  to  prevent  sale  of  land  or  to  remove 

cloud  on  title  or  encumbrance,  239,  240. 
right  to  recover  for  improvements  on  land  by  one  who  mistakenly 

supposed  he  was  owner,  186-189. 
right  to  recover  money  paid  in  discharge  of  another's  obligation 

to  prevent  sale  of  plaintiff's  land,  248. 
LAPSED   LEGACY: 

right  of  executor  who  has  paid  lapsed  legacy  by  mistake  to  re- 
cover, 185. 

LAW,  COMPULSION  OF.  See  DURESS;  LEGAL  PROCEEDINGS; 
JUDGMENT  ;  TAX  OR  ASSESSMENT  ;  DISCHARGE 
OF  ANOTHER'S  OBLIGATION;  INDEMNITY;  CON- 
TRIBUTION. 

LAW,    IGNORANCE    OR   MISTAKE    OF.     See  MISTAKE  OF  LAW. 
LAW,  PROHIBITION  BY.     See  GOVERNMENT,  ACT  OF. 
LEASE : 

money  paid  for  assignment  of  void  lease,  60. 
LEGACY : 

services  rendered  in  expectation  of,  48. 
See  LAPSED  LEGACY. 
LEGAL   PROCEEDINGS: 

money  paid  or  other  benefit  conferred  under  constraint  of,  228-236. 
See  DURESS  ;    JUDGMENT. 
LICENSE    TAX.     See  TAX  OR  ASSESSMENT. 
LIEN: 

money  paid  under  constraint  of  assertion  of  fictitious  lien  on  real 

property  or  refusal  to  remove  valid  lien,  217. 

LIMITATIONS,    STATUTE    OF.     See  STATUTE  OF  LIMITATIONS. 
LOCUS   PCENITENTLE: 

money  paid  or  other  benefit  conferred  under  illegal  contract  by 
plaintiff  who   withdrew   before   the  illegal   purpose 
was  accomplished,  144—147. 
LOTTERY : 

purchaser  of  ticket  not  in  pari  delicto  with  operator  of  lottery, 

140,  n. 
LUNATICS.     See  INSANE  PERSONS. 

MALUM   IN   SE: 

no  difference  in  degree  of  delinquency  recognized  in  case  of  con- 
tract malum  in  se,  138. 
MALUM   PROHIBITUM: 

right  of  less  delinquent  party  to  a  contract  malum  prohibitum,  138. 
MARRIAGE : 

induced  by  false  representations.     See  WAIVER  OF  TORT. 

488 


INDEX 

[References  are  to  Sections] 

MARRIAGE   BROKAGE   CONTRACTS: 

money  paid  under,  151. 
MARRIED   WOMAN: 

money  paid  or  other  benefit  conferred  under  contract  of  married 

woman,  68. 
MASTER   AND   SERVANT: 

right  of  servant  who  has  broken  contract  to  recover  value  of  serv- 
ices rendered.     See  BREACH  OP  CONTRACT. 
abduction  or  enticement  of  servant.     See  WAIVER  OF  TORT. 
MATERIALS   FURNISHED.     See  SERVICES. 
MEASURE    OF   RECOVERY: 
in  general,  3. 

in  action  for  recovery  of  benefit  conferred  under  contract  unen- 
forceable because  of  Statute  of  Frauds,  104-107. 
in  action  for  recovery  of  benefit  conferred  under  contract  which 

becomes  unenforceable  because  of  impossibility  of 

performance,  125,  126. 
in  action  for  recovery  of  benefit  conferred  under  contract  which 

becomes  unenforceable  because  of  plaintiff's  breach, 

178. 
in  action  for  value  of  services  rendered  under  mistake  as  to  status, 

184. 
in  action  for  recovery  of  benefit  conferred  in  improving  land  under 

mistake  as  to  ownership,  189. 
in  action  for  recovery  of  money  paid  under  a  judgment  subsequently 

reversed,  235. 
in  action  for  restitution  as  remedy  for  repudiation  or  breach  of 

contract,  268,  269. 
in  case  of  waiver  of  tort,  292,  293. 
MEASUREMENT : 

overpayment  resulting  from  mistake  as  to,  179. 
MEDDLING,  OFFICIOUS.  See  OFFICIOUSNESS. 
MISCONDUCT  OF  PLAINTIFF: 

•     as  justifying  retention  of  benefit  conferred  by  mistake,  21. 
MISRELIANCE : 
in  general,  10-34. 
definition  of,  10. 
causes  of,  11,  12. 

negatived  by  knowledge  or  belief,  13-15. 
not  negatived  by  negligent  failure  to  ascertain  facts,  15. 
negatived  by  doubt :   assumption  of  risk,  16. 
negatived  by  compromise  or  settlement,  17. 
on  right  or  duty,  as  distinguished  from  policy,  18. 
on  right  or  duty  to  third  person,  19,  86. 
on  contract  unenforceable  because  of  Statute  of  Frauds.     See 

STATUTE  OF  FRAUDS. 
on  contract  unenforceable  because  of  impossibility  of  performance. 

See  IMPOSSIBILITY  OF  PERFORMANCE. 

on  non-existent  or  invalid  contract.     See  VOID  CONTRACT. 
on  forged  or  altered  negotiable  instruments.     See  NEGOTIABLE 

INSTRUMENTS. 

on  illegal  contract.     See  ILLEGAL  CONTRACTS. 
on   contract   unenforceable   because   of   plaintiff's   breach.     See 

BREACH  OF  CONTRACT. 
on  non-contract  obligation,  183-185. 

489 


INDEX 

[References  are  to  Sections] 

MISRELIANCE  —  Continued: 

on  requirements  of  valid  contract.     See  CONTRACT. 

on  ownership  of  property.     See  IMPROVEMENTS  ON  LAND  ;    PER- 
SONAL PROPERTY. 
MISTAKE   OF  FACT: 

distinguished  from  mistake  of  law,  11. 

mistake  of  anticipated  fact,  12. 

resulting  from  negligence,  15. 

affecting  relations  with  third  person,  19. 

mistake  of  both  fact  and  law,  44. 

See  MISRELIANCE. 
MISTAKE   OF   LAW: 

distinguished  from  mistake  of  fact,  11. 

money  paid  under,  35-44. 

reasons  for  the  denial  of  recovery  unsound,  36. 

encroachment  upon  the  rule,  37. 

tendency  to  reject  rule  in  equity,  38. 

statutory  modification  of  rule,  39. 

payments  by  public  officers  under,  40. 

payments  to  trustees  or  court  officers  under,  41. 

what  is  the  true  principle,  42. 

mistake  of  foreign  law,  43. 

mistake  of  both  fact  and  law,  44. 

in  case  of  benefit  conferred  under  contract  unenforceable  because 
of  Statute  of  Frauds,  94. 

in  case  of  benefit  conferred  under  illegal  contract,  134. 
MISTAKE,    MONEY   PAID   UNDER.     See  MONEY  PAID. 
MONEY   BORROWED: 

by  corporation  under  ultra  vires  contract,  158-159. 

See  USURY. 

MONEY   HAD   AND   RECEIVED.     See  MONEY  PAID. 
MONEY   LENT.     See  MONEY  BORROWED  ;  USURY. 
MONEY   PAID: 

under  mistake  of  fact:  in  general,  10-31. 

under  mistake  of  law.     See  MISTAKE  OP  LAW. 

under  non-existent  or  invalid  contract.     See  VOID  CONTRACT. 

under  mistake  as  to  genuineness  of  negotiable  instrument.  See 
NEGOTIABLE  INSTRUMENT. 

under  contract  unenforceable  because  of  Statute  of  Frauds.  See 
STATUTE  OF  FRAUDS. 

under  contract  unenforceable  because  of  impossibility  of  perform- 
ance. See  IMPOSSIBILITY  OP  PERFORMANCE. 

under  illegal  contract.     See  ILLEGAL  CONTRACTS. 

under  ultra  vires  contracts.     See  ULTRA  VIRES  CONTRACTS. 

under  contract  which  becomes  unenforceable  because  of  plaintiff's 
breach.  See  BREACH  OF  CONTRACT. 

under  mistake  as  to  terms  or  requirements  of  contract.  See 
CONTRACT. 

under  mistake  as  to  duty  as  executor  or  administrator.  See 
EXECUTOR  OR  ADMINISTRATOR. 

for  preservation  of  another's  property.  See  DUTIFUL  INTER- 
VENTION IN  ANOTHER'S  AFFAIRS. 

in  discharge  of  another's  obligation.  See  DISCHARGE  OF 
ANOTHER'S  OBLIGATION  ;  INDEMNITY  ;  CONTRIBU- 
TION. 

490 


INDEX 

[References  are  to  Sections] 

MONEY  PAID  —  Continued: 

under  duress.     See  DURESS. 

under  constraint  of  legal  proceedings.  See  LEGAL  PROCEEDINGS  ; 
JUDGMENT. 

under  constraint  of  tax  or  assessment.  See  TAX  OR  ASSESS- 
MENT. 

under  contract  subsequently  rescinded.  See  RESCISSION  OP- 
CONTRACT. 

under   inducement   of   fraudulent   representation.     See   WAIVER 

OF  TORT. 
MORAL  OBLIGATION  OF  PLAINTIFF  TO  CONFER  BENEFIT  : 

as  justifying  retention  of  benefit  by  defendant,  22. 
MORTGAGE : 

discharge  of  mortgage  which  another  ought  to  have  paid,  to  pre- 
vent sale  of  plaintiff's  property,  248. 
MUNICIPAL   CORPORATION: 

obligation  of,  to  pay  for  necessaries  furnished  to,  or  funeral  ex- 
penses of  pauper,  204,  205. 

right  of,  to  indemnity  in  case  of  joint  tort  liability,  258. 

See  ULTRA  VIRES  CONTRACTS. 

NATIONAL  BANK  ACT: 

recovery  of  usurious  interest  under,  227. 
NECESSARIES : 

furnished  infant  or  insane  person,  202. 
furnished  wife  or  children,  203. 
furnished  pauper,  204. 
NEGLIGENCE  : 

benefit  conferred  under  mistake  due  to,  15. 

effect  of,  upon  right  to  recover  money  paid  under  mistake  as  to 

genuineness  of  negotiable  instrument,  83,  92. 
See  WAIVER  OF  TORT. 
NEGOTIABLE    INSTRUMENTS : 

money  paid  by  drawee  under  mistake  as  to  genuineness  of  body  of 

instrument,  80-88. 
money  paid  by  drawee  under  mistake  as  to  genuineness  of  indors- 

er's  signature,  80-^88. 
money  paid  by  drawee  under  mistake  as  to  genuineness  of  drawer's 

signature,  80-88. 
money  paid  by  payor  for  honor  under  mistake  as  to  genuineness 

of  drawer's  signature,  89. 
money  paid  under  mistake  as  to  genuineness  of  payer's  signature, 

90. 
money  paid  under  mistake  as  to  genuineness  of  bill  of  lading 

attached  to  draft,  91. 

effect  of  negligence  or  laches  upon  right  to  recover  money  paid 
under  mistake  as  to  genuineness  of  negotiable  in- 
strument, 92. 

money  paid  by  drawee  under  mistake  as  to  state  of  drawer's  ac- 
count, 19,  182. 
NEGOTIORUM   GESTIO: 

as  quasi  contractual  obligation  in  Roman  and  modern  Civil  law, 

191. 

NON-EXISTENT   CONTRACT.     See  VOID  CONTRACT. 
NOTICE.     See  DEMAND. 

491 


INDEX 

[References  are  to  Sections] 

OFFICIAL  OBLIGATIONS : 

as  quasi  contracts,  1. 
OFFICIOUSNESS : 

in  conferring  a  benefit  under  a  supposed  contract,  56. 
in  interfering  in  another's  affairs,  196. 
in  paying  funeral  expenses,  205. 
OVERDRAFT : 

money  paid  by  bank  under  mistake  as  to  state  of  depositor's 

account,  19,  182. 
OVERPAYMENT : 

right  to  recover  overpayment  made  under  mistake  as  to  require- 
ments of  contract,  179. 

right  of  executor  or  administrator  to  recover  overpayment  to 
legatee  or  distributee,  185. 

PAROL   CONTRACT: 

money  paid  in  performance  of  parol  contract  which  does  not  ex- 
press intention  of  parties,  181. 
PAROL   EVIDENCE    OF   CONTRACT: 

admissibility    of,    in    action    to   recover   benefit    conferred  under 
contract  unenforceable  because  of  Statute  of  Frauds, 
103. 
PARTNERSHIP : 

money  paid  or  other  benefit  conferred  under  sealed  contract  with 

firm  executed  without  authority,  73. 
illegal  transactions  by  partner ;  rights  of  co-partner,  149. 
PATENT : 

money  paid  for  assignment  of  void  patent,  62. 
money  paid  as  royalties  by  licensee  under  void  patent,  62. 
infringement  of.     See  WAIVER  OF  TORT. 
PAUPER : 

money  paid  by  mistake  to  support,  22. 
PAYMENT : 

payment  over  by  defendant  as  a  defense,  27-29. 
See  MONEY  PAID  ;  OVERPAYMENT. 
PAYOR   OF   NEGOTIABLE    INSTRUMENT: 

money  paid  by,  under  mistake  as  to  genuineness  of  his  own  sig- 
nature, 90. 

See  NEGOTIABLE  INSTRUMENTS. 

PAYOR    OF    NEGOTIABLE    INSTRUMENT    FOR    HONOR: 
money  paid  by,   under   mistake  as  to   genuineness  of   drawer's 

signature,  89. 

See  NEGOTIABLE  INSTRUMENTS. 
PENALTY : 

tax  or  assessment  paid  under  constraint  of  onerous  penalty  for 

non-payment,  243. 

PERSONAL   PROPERTY.     See  GOODS. 
PHYSICIAN : 

right  to  recover  from  railroad  company  value  of  services  rendered 

to  injured  person  in  emergency,  201. 
See  NECESSARIES. 

PLAINTIFF  IN  DEFAULT  UNDER  CONTRACT.  See 
STATUTE  OP  FRAUDS  ;  IMPOSSIBILITY  OF  PER- 
FORMANCE ;  ILLEGAL  CONTRACTS :  BREACH  OF 
CONTRACT. 

492 


INDEX 

[References  are  to  Sections] 

POLICY : 

mistake  as  to,  distinguished  from  mistake  as  to  right  or  duty,  18, 

19. 

See  PUBLIC  POLICY. 

POSITION,     CHANGE      OF.     See  CHANGE   OP  POSITION  BY  DE- 
FENDANT. 
PREGNANCY : 

mistake  as  to,  17. 
PRESERVATION    OF   LIFE: 

services  rendered  in,  197,  201. 
PRESERVATION    OF   ANOTHER'S   PROPERTY: 

money  expended  or  services  rendered  in,  197,  206-208. 
PRINCIPAL   AND   AGENT: 

payment  over  or  settlement  with  principal  as  defense  to  agent,  27. 
money  paid  or  other  benefit  conferred  in  reliance  on  contract 

void  for  want  of  authority  in  an  agent,  72-79. 
money  paid  or  other  benefit  conferred  in  reliance  on  instrument 
under  seal  so  executed   by   agent   as  to  defeat  its 
purpose,  74. 

when  money  paid  by  mistake  to  agent  is  recoverable  from  prin- 
cipal, 75,  76. 

when  money  paid  by  mistake  to  agent  is  recoverable  from  agent,  77. 
illegal  transactions  by  agent ;   rights  of  principal,  148. 
right  of  principal  or  agent  to  indemnity,  258. 
PROMISSORY   NOTES.     See  NEGOTIABLE  INSTRUMENTS. 
PROPERTY.     See  GOODS  ;    LAND. 
PROTEST : 

necessity  of,  in  case  of  payment  of  illegal  charges  of  public  serv- 
ice corporation,  221. 
necessity  of,  in  case  of  payment  of  void  tax  or  assessment  under 

consti'aint,  244. 
PUBLIC   OFFICERS: 

payments  by,  under  mistake  of  law,  40. 
payments  to,  under  mistake  of  law,  41. 
right  to  recover  illegal  fees  exacted  by,  219. 
usurpation  of  office.     See  WAIVER  OF  TORT. 
PUBLIC   POLICY: 

as  affecting  right  to  recover  benefit  conferred  under  contract  un- 
enforceable because  of  Statute  of  Frauds,  103. 
as  affecting  right  to  recover  benefit  conferred  under  illegal  con- 
tracts, 135-147. 
as  affecting  right  to  recover  benefit  conferred  under  ultra  vires 

contracts  of  municipal  corporations,  161. 

as  affecting  right  of  bona  fide  occupant  to  recover  for  improve- 
ments on  land,  186-188. 

as  affecting  right  of  one  who  has  enhanced  value  of  personalty, 
under  mistake  as  to  ownership,  to  recover  for  such 
enhancement,  190. 
See  ILLEGAL  CONTRACTS. 
PUBLIC   SERVICE    CORPORATIONS: 

right  to  recover  illegal  charges  exacted  by,  220. 
PURCHASER  FOR  VALUE.     See  WAIVER  OF  TORT. 

QUANTUM   MERUIT.     See  ASSUMPSIT  ;    SERVICES  RENDERF  .. 
QUANTUM   VALEBAT.     See  '      —  i>srr;    GOODS. 


INDEX 

[References  are  to  Sections] 

QUASI  CONTRACT: 
nature  of,  3-6. 

distinguished  from  contracts,  4. 
distinguished  from  duty  not  to  commit  a  tort,  5. 
distinguished  from  equitable  obligations,  6. 
essential  elements  of,  7-9. 

RAILROAD  COMPANY: 

liability  of,  for  services  rendered  to  injured  person  by  physician 

employed  by  subordinate  representative,  201. 
REAL  PROPERTY.     See  LAND. 
RELATIVES.     See  FAMILY  RELATIONSHIP. 
REMEDY : 

action  for  restitution  as  alternative  remedy  for  repudiation  or 

breach  of  contract.     See  RESCISSION  OF  CONTRACT. 

action  for  restitution  as  alternative  remedy  for  tort.     See  WAIVER 

OP  TORT. 

RENT.     See  USE  AND  OCCUPATION. 
REPAIRS : 

right  of  tenant  making  repairs  to  recover  from  cptenant,  208. 
right  of  one  who  performs  another's  duty  to  repair  road  to  recover 

value  of  his  services,  210. 

REPUDIATION  OF  CONTRACT.     See  RESCISSION  OF  CONTRACT. 
RESCISSION   OF   CONTRACT: 

recovery  of  money  paid,  services  rendered  or  goods  delivered  under 
contract  rescinded  by  the  plaintiff  because  of  repudia- 
tion or  substantial  breach,  260-269. 
is  the  obligation  quasi  contractual  ?  260. 
origin  of  the  doctrine,  261. 

application  to  case  of  goods  sold  or  services  rendered,  262. 
application  to  case  of  repudiation  and  to  cases  of  substantial 

breach,  263. 

application  to  case  of  contracts  under  seal,  264. 
restitution  by  plaintiff  as  condition  precedent,  265. 
what  constitutes  an  election,  266. 
necessity  of  notice  or  demand,  267. 
statute  of  limitations,  267. 
measure  of  recovery,  268,  269. 
RES  JUDICATA.     See  JUDGMENT. 
RESTITUTION,   ACTION   FOR: 

as  alternative  remedy  for  repudiation  or  breach  of  contract.     See 

RESCISSION  OF  CONTRACT. 

as  alternative  remedy  for  tort.  See  WAIVER  OF  TORT. 
RETURN  OF  CONSIDERATION.  See  CONSIDERATION. 
ROADS.  See  REPAIRS. 

SALE   OF   GOODS.     See  GOODS  ;  STATUTE  OF  FRAUDS. 
SALVAGE : 

maritime,  206. 

at  common  law,  207. 

SEALED   INSTRUMENTS.     See  INSTRUMENTS  UNDER  SEAL. 
SEAMAN : 

right  of,  to  recover  value  of  services  in  case  of  loss  of  vessel,  121. 
SECURITIES: 

money  paid  for  void  or  spurious  securities,  60. 
SERVANT.     See  MASTER  AND  SERVANT. 

494 


INDEX 

[References  are  to  Sections] 

SERVICES   RENDERED: 

gratuitously,  46-51. 

in  hope  of  reward,  48. 

burden  of  proving  that  services  were  not  gratuitous,  50. 

burden  of  proof ;   effect  of  family  relationship,  51. 

under  contract  void  for  indeflniteness,  64. 

in  performance  of  engagement  of  honor,  65. 

under  contract  unenforceable  because  of  Statute  of  Frauds.  See 
STATUTE  OP  FRAUDS. 

and  materials  furnished  in  improvement  of  building  which  is 
destroyed  in  course  of  improvement,  116-118. 

and  materials  furnished  in  case  of  destruction  of  personalty  in 
course  of  alteration  or  repair,  119. 

under  contract  which  becomes  unenforceable  because  of  plaintiff's 
breach.  See  BREACH  OP  CONTRACT. 

under  mistake  as  to  status,  184. 

in  preservation  of  property,  197,  206-208. 

in  preservation  of  life,  197-201. 

in  burial  of  dead,  205. 

in  performance  of  another's  contractual  duty,  209. 

under  duress.     See  DURESS  ;    WAIVER  OF  TORT. 

application  of  doctrine  of  rescission  of  contract  to  cases  of,  262. 
SET-OFF : 

right  of  bona  fide  occupant  to  set  off  value  of  improvements  in 

action  for  mesne  profits,  187. 
SETTLEMENT.     See  COMPROMISE. 
SHERIFF.     See  PUBLIC  OFFICERS. 
SITUS   OF  PROPERTY: 

money  paid  under  mistake  as  to,  60. 
SLAVE : 

services  rendered  by  one  who  mistakenly  believes  himself  to  be  a 

slave,  184. 

SPENDTHRIFTS.     See  INSANE  PERSONS. 
STATUS : 

services  rendered  under  mistake  as  to,  184. 

STATUS   QUO: 

plaintiff's  failure  to  restore,  as  justifying  retention  of  benefit  by 

defendant,  23. 
STATUTE    OF   FRAUDS: 

money  paid,  services  rendered,  goods  delivered,  or  land  conveyed 
under  contract  unenforceable  because  of  Statute  of 
Frauds,  93-108. 

when  defendant  defaults,  95-97. 
when  plaintiff  defaults,  98. 
when  neither  party  defaults,  99. 
when  contract  enforceable  in  equity,  101,  102. 
enforcement  of  restitution  not  against  public  policy,  103. 
admissibility  of  parol  evidence  of  contract,  103. 
measure  of  recovery,  104-107. 
necessity  of  demand,  108. 
statute  of  limitations,  108. 
interest,  108. 
STATUTE  OF  LIMITATIONS: 

in  case  of  money  paid  by  mistake,  33. 

495 


INDEX 

[References  are  to  Sections] 

STATUTE  OF  LIMITATIONS  —  Continued: 

in  case  of  benefit  conferred  under  contract  unenforceable  because 
of  Statute  of  Frauds,  108. 

in  case  of  benefit  conferred  under  illegal  contract,  150. 

in  case  of  rescission  of  contract  for  repudiation  or  breach,  267. 

in  case  of  waiver  of  tort,  294. 
STATUTORY   DUTY: 

performance  of  another's  statutory  duty  to  repair  roads,  210. 

See  DUTIFUL  INTERVENTION  IN  ANOTHER'S  AFFAIRS. 
STATUTORY   OBLIGATIONS: 

as  quasi  contracts,  1. 

STATUTORY   PROHIBITION.     See  GOVERNMENT,  ACT  OP. 
STIFLING  PROSECUTION : 

money  paid  under  contract  entered  into  for  purpose  of,  141. 
SUBSTANTIAL   PERFORMANCE : 

right  of  contractor  in  default,  under  doctrine  of,  175. 
SUNDAY : 

money  paid  or  other  benefit  conferred  under  contract  made  or  to  be 

performed  on,  153. 
SURETY.     See  INDEMNITY  ;  CONTRIBUTION. 

TAX  OR  ASSESSMENT: 

paid  under  mistake  as  to  payer's  obligation,  183. 
paid  by  occupant  under  mistake  as  to  ownership  of  land,  187. 
paid  under  constraint,  237-246. 
duress  of  person  or  goods,  238. 
sale  of  real  property  ;  cloud  on  title,  239. 
incumbrance  of  property,  240. 
prevention  of  recordation  of  deed,  241. 
interference  with  business ;   onerous  penalties,  242. 
where  tax  is  irregularly  assessed  or  collected,  but  is  not  void, 

243. 

necessity  of  protest,  244. 
recovery  of  interest,  244. 
necessity  of  demand  and  notice,  245. 
statutory  remedy,  246. 
payment  of  tax  or  assessment  which  another  ought  to  have  paid, 

to  prevent  sale  of  plaintiff's  property,  248. 
TENANT : 

right  of  tenant  making  repairs  to  recover  from  cotenant,  208. 
TERMS   OF   CONTRACT: 

money  paid  or  other  benefit  conferred  under  mistake  as  to  terms 

of  contract,  179. 
THREATS.     See  DURESS. 
TIMBER : 

right  of  one  who  cuts  under  mistake  as  to  ownership  to  recover  for 

services,  190. 
TITLE : 

money  paid  for  non-existent  or  defective  title,  63. 
TORT: 

action  for  restitution  as  alternative  remedy  for.     See  WAIVER  OF 

TORT. 

TORT-FEASOR.     See  INDEMNITY  ;    CONTRIBUTION. 
TRANSPORTATION    OF    PERSONAL    PROPERTY.     See  PER- 
SONAL PROPERTY. 

496 


INDEX 

[Referen  ces  are  to  Sections] 

TRESPASS   ON   LAND.     See  WAIVER  OF  TORT. 

ULTRA  VIRES   CONTRACTS   OF   CORPORATIONS: 

money  paid,  services  rendered,  or  property  transferred  under  ultra 

vires  contract,  154-161. 
the  English  doctrine,  157,  158. 

the  doctrine  of  the  United  States  Supreme  Court,  159. 
the  attitude  of  the  State  courts,  160. 
ultra  vires  contracts  of  municipal  corporations,  161. 
UNDUE   INFLUENCE.     See  DURESS. 
UNJUST    ENRICHMENT,  1,  8. 

See  BENEFIT,  RECEIPT  OF. 

UNPERFORMED   CONTRACT.     See  BREACH  OF  CONTRACT. 
USE    AND    OCCUPATION: 

obligation  of  lessee  or  purchaser  of  land  under  contract  unenforce- 
able because  of  Statute  of  Frauds  to  pay  value  of,  97. 
liability  of  trespasser  for,  284. 

USURPATION   OF   OFFICE.     See  WAIVER  OF  TORT. 
USURY : 

borrower  under  usurious  contract  not  in  pari  delicto  with  lender, 

140. 

right  to  recover,  222-227. 

right  to  have  usurious  interest  applied  in  diminution  of  principal, 
226. 

VESSEL : 

right  of  carrier  to  recover  freight  in  case  of  disablement  of  vessel, 

120. 
right  of  carrier  to  recover  freight  in  case  of  excusable  loss  of  goods, 

120. 

right  of  owner  of  goods  to  recover  prepaid  freight  in  case  of  ex- 
cusable loss  of  goods,  129. 

right  of  seaman  to  recover  wages  in  case  of  loss  of  vessel,  121. 
See  CARRIER. 
VOID    CONTRACT: 

money  paid  or  other  benefit  conferred  in  mistaken  reliance  on, 

45-79. 
benefit  conferred  under,  as  distinguished  from  gift  or  gratuity, 

46-51. 
money  paid  or  other  benefit  conferred  in  misreliance  on  a  contract 

void : 

acceptance  of  offer  wanting,  52-58. 
because  of  ambiguity,  52. 
because  of  offeree's  ignorance  of  offer,  53. 
because  of  mistake  as  to  identity  of  offerer,  54. 
circumstances  justifying  retention  of  benefit,  55-58. 
assumed  fact  non-existent,  59-63. 

sale  or  lease  of  non-existent  property,  60. 
insurance  of  non-existent  risk,  61. 
assignment  of  void  patent,  62. 
sale  of  non-existent  or  defective  title,  63. 
promise  indefinite,  64,  65. 
required  form  wanting,  66. 
contractual  capacity  wanting,  67-71. 
married  women,  68. 

497 


INDEX 

[References  are  to  Sections] 

VOID  CONTRACT  —  Continued: 
infants,  69. 

lunatics,  drunkards,  and  spendthrifts,  70. 
corporations,  71. 

authority  of  agent  wanting,  72-79. 
See  ULTRA  VIRES  CONTRACTS. 

VOLUNTEER.  See  GIFT  OR  GRATUITY  ;  DUTIFUL  INTERVENTION 
IN  ANOTHER'S  AFFAIRS  ;  OFFICIOUSNESS  ;  PRES- 
ERVATION OF  ANOTHER'S  PROPERTY  ;  DISCHARGE 
OF  ANOTHER'S  OBLIGATION;  DURESS. 

WAGERING   CONTRACTS: 

money  paid  under,  152. 
WAIVER   OF   TORT: 

assumpsit  as  alternative  remedy  for  tort,  270-300. 

is  the  obligation  to  make  restitution  quasi  contractual  ?  270. 

essential  elements  of  the  obligation,  271-275. 

must  benefit  consist  of  money  received  by  tort-feasor  ?  273. 

must  benefit  consist  of  something  taken  from  plaintiff?  274. 

the  taking  of  intangible  things,  275. 

conversion,  277-280. 

goods  obtained  by  fraud,  278. 

goods  or  money  received  from  a  converter,  279. 

goods  used  and  returned,  280. 

deceit,  281,  282. 

inducing  void  marriage  by  false  representations,  282. 

trespass  on  land,  283,  284. 

use  and  occupation,  284. 

abduction  of  child  or  servant,  285. 

inducing  breach  of  contract,  285. 

false  imprisonment ;   services  under  compulsion,  286. 

usurpation  of  office,  287. 

infringement  of  patent  rights,  288. 

liability  of  joint  tort-feasors,  289. 

rights  of  owners  in  common,  290. 

infancy  or  insanity  as  a  defense  or  in  mitigation,  291. 

measure  of  recovery,  292,  293. 

interest,  293. 

statue  of  limitations,  294. 

effect  of  judgment  against  one  of  two  tort-feasors,  295. 

effect  of  judgment  in  favor  of  one  of  two  tort-feasors,  296. 

effect  of  satisfaction  by  one  of  two  tort-feasors,  297. 

what  constitutes  an  election,  298-300. 
WEIGHT,   MEASURE   OR   COUNT: 

mistake  as  to,  17. 

overpayment  resulting  from  mistake  as  to,  179. 

WILLFUL    BREACH     OF     CONTRACT.     See   BREACH  OF  CON- 
TRACT. 

WORK  AND   LABOR.     See  SERVICES  RENDERED. 
WORKING   CONTRACTS.     See    BUILDING     CONTRACTS;       SERV- 
ICES RENDERED. 

WRONGDOERS.     See   INDEMNITY;     CONTRIBUTION;     WAIVER    OF 
TORT. 


498 


UNIVERSITY  OF  CALIFORNIA  LIBRARY 

Los  Angeles 
This  book  is  DUE  on  the  last  date  stamped  below. 


81984 


PSD  1916     8/77 


